Business Daily from THE HINDU group of publications
Tuesday, Oct 27, 2009
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Business Daily from THE HINDU group of publications Tuesday, Oct 27, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Industry & Economy
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Education Columns - BL Club States - Tamil Nadu Mr T.N. Manoharan, past President, ICAI; Dept of Management Studies, Thiagarajar School of Management, Madurai Our Correspondent Madurai, Oct. 26 The Satyam saga underscores the need for ethical values to stay at the top, said Mr T.N. Manoharan, the past President of the Institute of Chartered Accountants of India. Delivering a lecture on ‘Financial statement fraud - Satyam case’ at Bulls and Bears, the financial club of the Department of Management Studies, Thiagarajar School of Management under the aegis of Business Line Club, sponsored by Karur Vysya Bank (KVB), he said while it might be easy to reach the top, only ethical values could help sustain at the helm. Outlining the manipulation of accounts at Satyam in the past years while the going was good, he said, accounting standards differed between India and abroad. The Indian approach was principles-based and the West followed rule-based standards, lending itself to manoeuvrability leading to frauds that preceded Satyam such as Enron, Worldcom, Xerox etc. Lack of enforcementLack of enforcement was the cause for the scam in India and the men at the helm of affairs took for granted what was presented, taken in by the size of operations of Satyam and the place of information technology sector in the economy, Mr Manoharan explained. The good factor in the retrieval of Satyam was the constitution of a Government-nominated board instead of allowing the market forces to take over. The board was given full freedom to continue the operations, with the enquiries left to the investigating agencies. Satyam had built up a good infrastructure with world class skills. Global recession drained its liquidity and outstandings piled up forcing a confessional statement. The bottomline of the fraud was the creation of fictitious assets. The unmanageable gap between actual and book profits forced the outcome, he said. Confidence-builderWhat instilled confidence in the clients of Satyam was the dedicated work of the Government-nominated board to find an alternate strategic investor at the earliest opportunity with ability to continue and the non-receipt of the sitting fees by the board, he added. Mr T.K. Sankaravadivel, Assistant General Manager, KVB, Mr T. Murali, Regional General Manager, The Hindu, and Dr M. Nagaraju, Principal, TSM, were present. More Stories on : Education | BL Club | Tamil Nadu
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