What is true of Satyam is more or less true of all large business houses except a few conservative ones. The Ministry of Company Affairs must draft new laws making statutory auditors per se liable to criminal action for failure to check the accounts in an efficient manner, which left unexposed such a degree of false accounting and for such a long time.
An enquiry of ICAI into the conduct of the statutory auditor is like judging one’s own case. It is no secret that this cash-rich body wields extraordinary influence in drafting of corporate laws to protect its constituents as well as company directors.
Thanks to excessive liberalisation, almost any amount of diversion of company funds is possible after Section 372 A replaced the 1998 Ordinance.
Laws of takeover and amalgamation are so lax that ex facie unsound schemes pass muster.
I have been studying “company cases” for over a decade and am convinced that the ills of corporate governance owe their origin to large companies. I would like you to to find out which company first used the book-building system for “further issue” of shares at high premiums. Which company’s application seeking interpretation of rules of postal ballot was entertained by the court? And at which company’s instance were the rules of postal ballot changed when they were the property of Parliament on placement under Section 642 (3)? Which company refused to convert the convertible debentures or proposed such complex schemes of arrangement on which no man of ordinary intelligence could take a decision? Which company was detected to have issued duplicate shares and yet went unharmed?
Don’t treat Satyam as an isolated case.
H P Johari, Kolkata
