The Government of MoUs can also take lessons from Enron / Satyam scam
The Government of MoUs (read Odisha Govt) can also take lesions from Enron Scam in USA and the current Satyam scam in India. No body can forget the Enron led DPC saga in India too. Following is the link of an editorial of a business daily on Enron-Satyam scam which is worth reading:
The day before Ramalinga Raju admitted to accounting irregularities at Satyam, a US federal appeals court threw out former Enron CEO Jeff Skilling's 24-year prison term and ordered a resentencing. At the same time, it upheld Skilling's 2006 convictions (on 19 counts of fraud, conspiracy, insider trading and lying to auditors) for his role in Enron's 2001 collapse. Given that Skilling is the highest-ranking executive to be punished for the Enron scam (after founder Kenneth Lay's convictions were vacated when he died), does his enduring case inspire confidence about the outcome of what's being called India's Enron? How did Enron prosecutors circumvent the challenges of multiple agency investigations, and what does their experience portend for Satyam? In the Enron case, in addition to the inquiries pursued by the FBI, SEC and IRS, the labour department also investigated if the company had improperly prevented its employees from selling their stocks while the justice department investigated its off-the-books deals and accounting practices. But holding all the threads together was a special federal task force assembled soon after the company's collapse. Fronting the task force was a crew of top prosecutors, and even then Skilling and Lay's convictions took until 2006 to materialise.
On the home front, the Serious Fraud Investigation Office has been mandated (after the Registrar of Companies examined Satyam's accounts) to launch a formal investigation into the Satyam fraud. Sebi is following the possibilities of insider trading (as well as reviewing the accounting statements of all Nifty and Sensex companies), RBI is pursuing possible collusion by banks and the Andhra Pradesh police is conducting the criminal investigation. In addition, the Institute of Chartered Accountants of India is looking at the conduct of Price Waterhouse. Now, not only does India have one of the poorest corporate fraud conviction rates in the world, but we are also entering new waters with the Satyam case. We have no history of dealing with fraud of this order, potentially extending beyond the company to venerated auditors and bankers. Responding to the public's cry for justice with one inquiry after another will simply not suffice. These inquiries will have to be anchored together. An anchoring mechanism akin to the Enron task force will have to be devised. Until this comes to pass, the following conundrum will be repeated in different forms: even the arrests of
Satyam's former CFO and the Raju brothers, fÃªted for their speediness on the one hand, are simultaneously being accused of thwarting the pursuit of justice. Sebi has had to file a local petition to interview these alleged fraudsters. India's Enron needs an Indian version of a special prosecutor.
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