Satyam scandal highlights emerging market risks January 8, 2009
Posted by dhirendra1972 in Asian Markets, Business, Capital Market, Finance, financial market, Indian IT Company, Marketing Talk, Online Marketing, Raju, Ramalinga, Ramalinga Raju, satyam computers, Stock Market Talk.Tags: Indian Software Company, IT Company, IT news, Ramalinga Raju, Satyam, satyam computers, Satyam News, Software News
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Good Morning friends, something alarming and shocking for Indian inverters. I am also a small inverter in Indian stock market. My feeling is how is this possible? And if this is possible than we should not trust any one. I know others are not like this and I not mean to raise any finger on others too. But I just try to feel feelings of investors and employee of the company who are looking at the management with high respect and values. I read following news at the economic times.
A vast accounting scandal at Satyam Computer Services may increase investor nervousness about weak corporate governance and oversight in
emerging markets.
Satyam founder and chairman Ramalinga Raju admitted on Wednesday to inflating Satyam’s reported cash and bank balances by over 50 billion rupees ($1 billion), but little is known about how widespread the problem is and things could get worse if other frauds are uncovered.
The scandal, which is being dubbed by some analysts as “India’s Enron” and compared to Bernard Madoff’s alleged $50 billion Ponzi scheme in the United States, comes at a bad time for emerging markets.
Benchmark emerging equities are down 52 per cent since the beginning of 2008 as investors fled risk and hopes of a “decoupling” from a slowdown in developed markets proved mostly unfounded.
“It’s got to shake confidence. And it is compounded in my mind by what I already call the fear complex that exists around all global markets,” said Lesley Hand, a partner in accounting firm KPMG LLP’s forensic practice.
“The thing you don’t know here is how far reaching this is,” Hand said. “I don’t know if it will be long, long-term. But you let another shoe or two drop and I would say it would be way worse.”
