Radical restructuring of SEBI is extremely imperative, say Pathikrit Payne & Sray Agarwal of B&E
Is it becoming a unique Indian trend to first shower companies with all kinds of fancy awards only to be egged in the face in a few years’ time after all the wrong doings, malpractices and manipulation that went unheard and unseen in those companies? While the Satyam fiasco suddenly awakened the investors’ community about the intriguing aspect of how lectures on corporate governance & best practices and fudging of accounts can go hand in hand, the matter of the fact is that Satyam is not a one-time case. In1999, two sister software companies namely, Pentasoft Technologies Ltd and Pentamedia Graphics Ltd. had a phoenix like rise and a subsequent fall faster than nine-pins thanks to a mindless expansion spree and attempts of diversifying into real-estates and multiplexes while the core business of software development got compromised. Their promoter V. Chandrasekaran was reported to be associated with broker Ketan Parekh in artificially raising the share prices.
So, does the model sound familiar? If not, then next in the line is the Dinesh Dalmia who promoted DSQ Software Limited. In the year 2000, CBI arrested him for his involvement in a stocks scam of Rs. 5.95 billion and for his attempts to make quick money through unallotted shares worth Rs. 13 million (which were not listed on any stock exchange). He also cooked his books in the typical Ramlinga Raju style. Sadly, corporate India is littered with cases of similar frauds. Just like Satyam, the South India-based IT Company Silverline Technologies was also vested upon with lots of awards and Ravi Subramanian, Chairman of Silverline Technologies was even tagged as the next Narayana Murthy in the making. It was ranked among the top five IT companies in India. Akin to Satyam, Silverline took-over Seranova, but didn’t have money to pay up for the deal. And remember all these were happening just under the nose of SEBI. While Dalmia is still fighting it out to get his bail approved, Silverline is back in business and has been re-listed on BSE.
So, does the model sound familiar? If not, then next in the line is the Dinesh Dalmia who promoted DSQ Software Limited. In the year 2000, CBI arrested him for his involvement in a stocks scam of Rs. 5.95 billion and for his attempts to make quick money through unallotted shares worth Rs. 13 million (which were not listed on any stock exchange). He also cooked his books in the typical Ramlinga Raju style. Sadly, corporate India is littered with cases of similar frauds. Just like Satyam, the South India-based IT Company Silverline Technologies was also vested upon with lots of awards and Ravi Subramanian, Chairman of Silverline Technologies was even tagged as the next Narayana Murthy in the making. It was ranked among the top five IT companies in India. Akin to Satyam, Silverline took-over Seranova, but didn’t have money to pay up for the deal. And remember all these were happening just under the nose of SEBI. While Dalmia is still fighting it out to get his bail approved, Silverline is back in business and has been re-listed on BSE.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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