Auditors face charges in Satyam fraud - Accountancy Age.
Auditors caught up in India’s Satyam scandal have been charged with the offence of luring investors to buy shares of the company by ‘knowingly certifying forged and inflated balance sheets’.
The allegations against PricewaterhouseCoopers’ Subramani Gopalakrishnan and Talluri Srinivas have been detailed in a written submission by the Central Bureau of Investigation (CBI) of India, made to the High Court in the state of Andhra Pradesh. The law enforcement body is opposing a bail application made for the accused.
Apparently though:
Meanwhile, any bad publicity associated with the Satyam affair does not appear to have dented PwC’s reputation. It has announced that it will be increasing its staff by 50% in India.
The raeson? International Financial Reporting Standards are coming to India. Now there’s a cae of regualtion by the chaps for the benefit of the chaps if ever there was one.
Richard Murphy PWC
There is a new post this morning on my Enough Economics blog – on the need to accept constraints.
Richard Murphy Economics
FT.com / Companies / Rail - National Express rail empire hopes end.
I think it’s time to face reality:
1) Privatisation does not pass risk to the private sector - only profits
2) Rail privatisation has failed
3) We once had a very good rail operator who required a much lower level of subsidiy for a much higher level of efficiency than we have now - that operator was called British Railways.
And that’s where we should be heading back to.
The East Coast route should stay in public hands - and be joined by all other franchises as they end or fail.
Then we can have a cohesive transport system again.
Richard Murphy Economics
FT.com / Companies / UK companies - Nearly 75% of private equity exits end with receiver.
Nearly three-quarters of all UK private equity exits ended in administration in the three months to June, underlining the scale of challenges facing the industry as the value of new buy-out deals shrank to a 14-year low.
Out of 108 buy-out exits this year, nine were secondary buy-outs, 25 were trade sales and 74 ended in receivership, according to research published on Wednesday by the Centre for Management Buy-Out Research (CMBOR) at Nottingham University.
There were no buy-out exits via a stock market flotation for the sixth consecutive quarter, another record.
Surely this shatters the private equity bubble for good? Not only did they receive massive state subsidy in the form of interest tax relief, profit exported abroaduntaxed and low rates of capital gains tax on what should have been income, they also very obviously failed to add value. In fact, as this data shows, they were just riding the back of an asset bubble, in exactly simialr fashion to the housing market.
I have nothing against venture capital: I have run VC backed companies. But private equity is just asset stripping. There has never been a place for that in a sustainable economy. It has to go.
Richard Murphy Private equity
The FT has noted:
Wanted: old banking hand with a halo to take on high pressure role in the political spotlight.
The emergence of Sir Win Bischoff as the frontrunner to become chairman of Lloyds Banking Group has highlighted the short supply of well-qualified candidates for leading roles in the sector.
The 67-year-old former chairman of Citigroup is in a small field of candidates at a time when three banking institutions are searching for new chairmen.
I guarantee you: he’s the wrong man.
But that’s not really the point. The reality is that the shortage of candidates to manage these banks is not caused by a lack of suitable people; the cause is that these banks are unmanageable. Win Bischoff could not manage Citi. He won’t be able to manage Lloyds.
When we create organisations that are ‘too big to fail’ management goes out of the window: it has to survive but the inherent conflicts in that process of survival are too great to reconcile, as recent events have shown. No one can reconcile those claims, so there are non candidates because the job is wrong, and that’s because the organisation is wrong.
The job of UK Financial Investments is not to offer up another failed banking grandee as a sacrificial lamb to Lloyds Bank; it’s job is to split Lloyds into manageable parts. Then appoint people to run it.
Richard Murphy Banking, Economics
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