In an event that is likely to leave a deep and a long lasting scar on corporate management practices in India, Ramalinga Raju, the controversial Chairman of Satyam, one of India’s largest IT services dropped the biggest of the bombs so far when he resigned today, owning responsibility of a fraud running into billions of rupees. The company’s balance sheet, it is believed, has in reality just 6% of the total Rs 54 bn that it is reported to have. In other words, funds totaling Rs 50 bn are non-existent. In a confession letter sent to the stock exchanges, Mr. Raju wrote, "Every attempt to eliminate the (balance sheet) gap failed. As the promoters held a small percentage of equity, the concern was that poor performance would result in a takeover, thereby exposing the gap. It was like riding a tiger, not knowing how to get off without being eaten." While managements at other companies may not be riding the so-called tiger, confidence is likely to take such a beating, that the mauling will come at their doorsteps as well, resulting into market value erosion for no direct fault of theirs. Not a good position to be in, especially when the economy is already in the doldrums.
What does the auditors PWC have to say.....what audit have they done...audit trails..the very profession of auditing goes for a hit. The fate of 50,000 employees of satyam is pathetic. Pray god that they are in safe hands in the ensuing future.....Bad days ahead for the Indian companies....
Disclaimer: The author of this page is not a registered financial advisor, and you should not construe anything written here to be investment advise. You should consult a qualified broker or other financial advisor prior to making any actual investment or trading decisions. All information is a point of view, and is for educational and informational use only. No representation is being made that any investment made on the basis of data or information on this blog will result in profits. The author accepts no liability for any interpretation of articles or comments on this blog being used for actual investments.
Wednesday, January 7, 2009
Monday, December 22, 2008
Dollar Is King !!!! Atleast in Emerging economies !
These days are really different......Singh is King no doubt in Bollywood...
Companies are choking their sanctioned credit limits by trying to avail export packing credit in foreign currency(FCY) primarily USD. But all their efforts are in vain.
Today, you can pick up USD either from Singapore or European market at less than 2.00%. Add to it the statutory maximum margin prescribed by RBI for export packing credit at 100Bps. The company stands to raise funds at less than 3% pa.
Now comes the flipper….
Given that markets are efficient and information is assumed to be systematic and efficient, most of the companies have rushed to their bankers to avail foreign currency funds…the result the Banks have exhausted their FCY limits to borrow funds from abroad and have closed their USD taps. This is a very strange scenario…USD funds are available at dirt cheap rate….may be moving towards 1%...companies are flirting with export orders trying to raise dollars …but Banks have become impotent to disburse funds in FCY……
These days the Kings or Badshahs on the Indian Banking terrain are the ones disbursing Fcy…Primarily USD $......But at a huge cost…Yes when demand increases and supply remains negligible…Banks are charging over the roof and laughing away to their target bottom lines…..
Heard on the street that for a particular ECB deal a bank was charging LIBOR Plus 700 bps…a unheard event in the recent past….companies are a game for it…That’s the scenario……
Disclaimer: The author of this page is not a registered financial advisor, and you should not construe anything written here to be investment advise. You should consult a qualified broker or other financial advisor prior to making any actual investment or trading decisions. All information is a point of view, and is for educational and informational use only. No representation is being made that any investment made on the basis of data or information on this blog will result in profits. The author accepts no liability for any interpretation of articles or comments on this blog being used for actual investments.
Companies are choking their sanctioned credit limits by trying to avail export packing credit in foreign currency(FCY) primarily USD. But all their efforts are in vain.
Today, you can pick up USD either from Singapore or European market at less than 2.00%. Add to it the statutory maximum margin prescribed by RBI for export packing credit at 100Bps. The company stands to raise funds at less than 3% pa.
Now comes the flipper….
Given that markets are efficient and information is assumed to be systematic and efficient, most of the companies have rushed to their bankers to avail foreign currency funds…the result the Banks have exhausted their FCY limits to borrow funds from abroad and have closed their USD taps. This is a very strange scenario…USD funds are available at dirt cheap rate….may be moving towards 1%...companies are flirting with export orders trying to raise dollars …but Banks have become impotent to disburse funds in FCY……
These days the Kings or Badshahs on the Indian Banking terrain are the ones disbursing Fcy…Primarily USD $......But at a huge cost…Yes when demand increases and supply remains negligible…Banks are charging over the roof and laughing away to their target bottom lines…..
Heard on the street that for a particular ECB deal a bank was charging LIBOR Plus 700 bps…a unheard event in the recent past….companies are a game for it…That’s the scenario……
Disclaimer: The author of this page is not a registered financial advisor, and you should not construe anything written here to be investment advise. You should consult a qualified broker or other financial advisor prior to making any actual investment or trading decisions. All information is a point of view, and is for educational and informational use only. No representation is being made that any investment made on the basis of data or information on this blog will result in profits. The author accepts no liability for any interpretation of articles or comments on this blog being used for actual investments.
Friday, December 19, 2008
Stunning Photos
Here are a few stunning and one-in-a-thousand rare snaps...I suggest you to enjoy the journey on the slide show of these photos...
Stunning Photos
View SlideShare presentation or Upload your own.
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