Wednesday, January 07, 2009

Thank you, Mr.Raju...

...for taking away the last piece (the Cash Flow Statement) of the Annual Report, which many of us analysts used to once trust as a reliable source of financial information.

And also for writing this letter. I truly believe you've opened a Pandora's box so far as corporate governance is concerned. Some of the things I hope to learn over the next few days is:

1). How can a Company have "zero" cash on books and yet be able to show cash & bank balance of over Rs.5000 crore? (banks provides fake FD certificates? or the Company forges bank statements/certificates?

2). In the last 3-4 years, the Company claims to have paid Corporate tax of close to Rs.800 crores. On what; profits, which profits?

3). Cash = zero, debtors = overstated by 2000 crore, balance sheet size = 8000 crore, actual b/s size = ???

4). What statements (followed by actions) will come from PWC (the auditor-in-Chief @ Satyam), SEBI, Department of Company Affairs and GoI? (Will Satyam be auctioned-off under the aegis of GoI to various IT companies in India?).

Prof. Verma is right on (link1 & link2). GoI must take this up, and quickly.

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