Satyam fiasco

Enough ink (real and virtual) has been spent world over, writing about Satyam so I will not waste mine, other than a bit on corporate governance.
Some articles I have read, written by US based writers, have been painting India in a very bad light. It was kind of funny to see questions raised by these people from the country which is a home to the biggest scams in the world. Starting with Enron, Tyco and related Arthur Anderson fiasco, WorldCom, Maddoff, Sub-prime, sky high CEO compensations not linked to performance, .. I can go and on. To such an extent that recently, Nigeria, supposed to be the originator of most scams, was looking to be cleaner than US.
This same country is now taking a holier than thou attitude and raising concerns about quality of audits in 'third world or emerging market economies'.

Shame on you!

Yes, I agree, corporate governance is an issue, I am not making any attempt to condone it, the articles could have taken a neutral attitude, and not attack the country. There are good apples and there are bad apples. There are some other Indian corporates that have such high standards of governance and ethics that it could put lot of 'blue-blooded' US companies to shame.
And yes I do admit, I am not too surprised to see such fiasco in a country which finds itself among the top in the corruption index. Sad to say, but it is logical, unless corporate world is insulated completely from the political world. In case of Satyam, I think those worlds started meeting when a Satyam group company (Maytas) started bidding for infrastructure projects in the country. I am sure there are lot of gray areas towards contract awards, I would not be surprised to find that $1.6 Billion (or at least large amount of cash) did exist at certain point of time, and it was then moved to possibly 'win' those infrastructure contract. Corporate-Politics nexus is bound to be corrupt

Oh btw do you know who did the audits for Satyam? PriceWaterhouse Coopers... yes, the US based company.. who is governing this company and the audits they do? The US bosses are directly responsible for it. Look forward to a slew of suits against PWC should it come out that they did not act in good faith

I do hope though investigations are kept clean and transparent to the general public and justice meted out soon.

I am staying on the sidelines though for now in the market. I am afraid some more skeletons could come tumbling out from unforeseen places. Immediate risk would be other corporates where PWC is the auditor. Its likely they would like to come clean (or forced to come clean) about all their audit practices. I am waiting till dust settles on this before putting in more money. I would recommend putting in money only if you are convinced that the company is the bluest of blue chips or PSUs which are not likely to have such skeletons. Companies whose business is complex and gives opportunities for sleight of hand, or who have murky pasts would suffer

Lets see which shares from my holdings were trading up YTD

Do not treat these as recommendations

Mahindra & Mahindra 11%
Container Corporation 20%
Infosys 6%
TCS 12%

And what crashed?

Bharti -10%
L&T -6.5% (I think more due to the fact that recently they had picked up 4% in Satyam, ouch)
Reliance Communications -17.6%
Reliance Industries -6.6%

Take Care
Siddharth

P.S
I read a nice news heading - What's is the sanskrit word for Enron - Satyam