Indian Corporate Scandal Investigation Continues

WONG:
And as we have been reporting... India is in the middle of its biggest corporate scandal ever. Satyam Computer Services executives are accused of having conflicts of interest and fraud. Here's a closer look at the story.

STORY:
Just three months ago they received the Golden Peacock Award for excellence in corporate governance. But now India's fourth-largest software services exporter is in shambles.

Satyam Computer Services board has been sacked and its shares have plunged.

A botched attempt to buy two infrastructure firms in which management held stakes has caused concerns about conflicts of interest.

Analysts say the saga exposes serious shortfalls of corporate transparency in India.

[Ajay Thakur, Attorney]:
"It is a one-off but this will definitely raise an issue of corporate transparency. How you bring about transparency in the accounting process of a company, how to restore the faith of the investors in all the IT companies especially in this case, if not the entire corporate sector.

The seriousness of the fraud at Satyam has had the government step in to ensure the companys 53,000 employees keep their jobs.

[Amit Mitra, Apex Business Chamber]:
"I don't see any reason why India's IT trajectory and the kind of confidence India has given to it in any way will be retracted."

India's market regulator, the Securities and Exchange Board of India, and the Criminal Investigation Department of the state police, are continuing their investigations into the company.

Category:

News & Politics

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