Satyam: See no evil

07 January 2009

After the morning's development where the chairman and managing director of Satyam Computer Services tendered their resignations after confession of fraud, the key stock market index, Sensex, fell 749 points.

Investors and regulators are crying for blood and the Satyam stock got hammered by 80 per cent. The episode has left India Inc feeling shaken and stirred.

In a letter to market regulator Securities and Exchange Board of India (SEBI), Merrill Lynch has stated that it had terminated their advisor agreement with Satyam on 6 January when they came to understand there were accounting irregularities. However, in a letter with today's date Satyam chairman Raju has said that Merrill Lynch was still advising Satyam. The termination of Merrill Lynch agrement was announced later in the day.

Corporate affairs ministry has set as deadline for 14 January, ie, a week from now to the registrar of companies.

Minister of corporate affairs Premchand Gupta has said in a statement "No leniency will be shown towards those who have been found guilty in the fraud committed at Satyam. But, let us not presume anything as of now as it will affect not only the investigation but also the outcome."

"The new corporate law that is proposed has provisions so that the auditing standard will be prescribed by the government," he added.