The Indian regulators (the Ministry of Corporate Affairs headed by Minister Salman Khurshid, the Securities and Exchange Board of India headed by C.B. Bhave, and the Central Bureau of Investigation) would receive the blessings of many right-thinking investors and market participants if they go about bringing to account the frauds committed by Satyam Computer (now called Tech Mahindra) on investors aided by its former chiefs and officials, instead of asking the United States of America's securities market regulator, the Securities and Exchange Commission to go easy (newsreports here, here and here) on taking action against Satyam Computer for the impact of the company's fraud on US investors as the company's ADRs were also listed on a US stock exchange.
In India, other than the arrest of its former chiefs, Satyam Computer, as a company, has received absolutely no penal action for the fraud it committed on investors and the entire market. The fraud mainly involved falsifying its financial statements with inflated profits and revenue figures, and siphoning off funds.
The US SEC would do well not to get influenced by the Indian regulators' shameful plea for going soft on Satyam. If it does go soft then it will not have done the job it is required to do to uphold the provisions of securities laws in the US. The US investors would not gain by such a laxity.
1 comment:
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