January 2009 - Posts - Initial Private Opinion

January 2009 - Posts

Postings

Posted by Sandeep Parekh at 
I will not have many posts as I'm away to Davos. Though I promise to write some interesting posts in a bit, given that I'm attending sessions with speakers like, Nouriel Roubini, Nicholas Taleb, Robert Shiller, Kenneth Rogoff, Joseph Stiglitz who all predicted the crisis but were ignored and even ridiculed over the past few years. Share this...

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Panic - the story of modern financial insanity

Posted by Sandeep Parekh at 
I just read a fascinating book titled ' Panic - the story of modern financial insanity ' compiled by Michael Lewis . He has compiled over 50 pieces including some of his own articles. It looks at four different crises a) the 1987 market crash b) the Asian financial crisis and LTCM collapse c) the bursting of the internet bubble d) the current...

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Speaking transparency to power - SEBI and RTI

Posted by Sandeep Parekh at 
Recall my previous posts on my Right to Information application to the securities regulator, SEBI, to disclose their Board agenda notes and minutes of the Board meetings. The information was denied, as not being available in the form sought. Here is my appeal which is self explanatory: "Mr. M S Sahoo SEBI Appellate Authority – RTI SEBI Bhavan C4A...

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Improved disclosure on pledged securities

Posted by Sandeep Parekh at 
Here is the contrarian view of the improved disclosure decided by the SEBI Board yesterday regarding disclosure of pledged securities by controlling shareholder (promoters). It is too little too late. I've been going hoarse talking about a complete re-writing of the disclosure norms in India which leave so much to be desired. Three years of work...

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Insider trading - short swing profits

Posted by Sandeep Parekh at 
I wrote a piece in the Economic Times recently on the 'short swing profit' rule, which was proposed some time back. However, what has been passed by the regulator is a short swing prohibition. This kind of prohibition is unprecedented anywhere in the world and was passed without the time tested rule of posting proposals for public comment. Here...

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Satyam - Board minute gems

Posted by Sandeep Parekh at 
Stop press - update : Minutes of the audit committee meeting of Nov 2008 satyamAudit.pdf (don't miss the World Bank misrepresentation on pg. 8/9) The Satyam Board of Directors' meeting's minutes of the infamous 16th December 08 are out and they make for interesting reading. Here is a copy in pdf satyamBoardMins.pdf . See page 2 bottom "evaluation...

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Satyam - a dark parallel world

Posted by Sandeep Parekh at 
I just saw this AP story and couldn't help comparing it to the Raju/Satyam story - here is an edited version: "HARPERSVILLE, Ala. (AP) — With his world crumbling around him, investment adviser Marcus Schrenker opted for a bailout. However, his plan to escape personal turmoil was short-lived. In a feat reminiscent of a James Bond movie, the...

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Satyam I - what likely happend

Posted by Sandeep Parekh at 
In my FT piece , I discussed what was wrong with the story of the Raju confession, rather than what may be the correct story. Clearly, no one except those who carried out the fraud would likely know the story. Here is what may have happened as pieced together from my conversations with some of the people who are close to the action. Remember this is...

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Satyam - lessons for India Inc.

Posted by Sandeep Parekh at 
Here is a piece I wrote for the Financial Times Op-Ed stating why we should not believe the confession letter. More importantly, I think this event will impact the reputation of corporate India. India Inc needs to clean up its intestines to remain trustworthy. Here are excerpts: "The first thing I did, when I saw the now famous letter of B. Ramalinga...

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Satyam - introduction to series

Posted by Sandeep Parekh at 
I'm going to run a series of pieces on Satyam - please ignore the series if you have had more than your fill of the issue. As more facts seep in, I will keep updating the series as new facts are unraveled, recall, there are very few facts in the public domain except a dubious confession letter. First, the confession story doesn't add up. The...

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Satyam - couldn't get worse?

Posted by Sandeep Parekh at 
Whoa, big news on Satyam - Ramalinga Raju has confessed to his Board to 'cooking the books' for the past several years. The scale is breathtaking - witness actual operating profits for Sept 08 quarter is Rs. 61 crores ( Rs. 610 million); while the well cooked books show Rs. 649 crores (Rs. 6.49 billion). And this is only one quarter figures...

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Financial crisis

Posted by Sandeep Parekh at 
Today, I along with Prof. Arpita Ghosh, my colleague at the institute, spoke on the financial crisis at the ‘ IIM-A Doctoral Colloquium 2009 ’. A member from the institute in the audience had some views, many of which I don’t agree with. a) Markets are efficient. The crisis does not prove that herd behaviour took place. My take: Markets are random and...

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Financial crime vs. bank robbery

Posted by Sandeep Parekh at 
In another excellent posting on the New Yorker , James Surowiecki (author of Wisdom of the crowds ), talks about how getting caught doing financial crime (and doing the crime itself) is inversely proportionate to how well the markets are doing. Here are excerpts: "Along with slashed payrolls, rising foreclosures, and plummeting stock prices, 2008...

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Corporate Governance - more activism

Posted by Sandeep Parekh at 
Another victory for investors, though not decisive. Anyone following the Gujarat public sector companies may recall the government of gujarat was seeking to divert 30% of before tax profits of four Gujarat government dominated public companies which are listed towards government sponsored charity. As these have non governmental private shareholders...

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