Initial Private Opinion

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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Satyam - Board of directors quorum

Posted by Sandeep Parekh at 
A piece in the Times of India quotes an anonymous source in the Ministry of Corporate Affairs commenting on Clause 49 of the Listing Agreement - saying the Board meeting of Satyam will not be able to take place in the absence of a majority of directors being independent. Various other papers have started writing opinion pieces based on this assumption...

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Exit opportunities for regional exchanges

Posted by Sandeep Parekh at 
Finally, SEBI has given regional stock exchanges (RSEs) who don't have a business model a viable opportunity to de-recognise themselves as exchanges. The exchange would continue as companies and can be engaged in any business they like. The circular is nearly comprehensive and handles all the important issues and does an excellent job in terms of...

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101 on this blog and open copyright

Posted by Sandeep Parekh at 
I have been asked by several people to introduce something more basic for lay readers. Given the viewership of this site, most readers have a good understanding of business but not necessarily of the financial and securities markets. Clearly, this blog has, till now, a fairly specialised class of readers who are able to easily follow my views. Without...

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Satyam – resignation and poor advice

Posted by Sandeep Parekh at 
I thought the resignation of Mrs. Mangalam Srinivasan (or at least the one reported in the news) was very mature. It demonstrated contrition, it was humble and it talked the walk by resigning. She stated she had concerns at the meeting but admitted she was to blame for them not being recorded as dissent. At last, someone deserving of at least some degree...

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Satyam - from storm to maelstrom

Posted by Sandeep Parekh at 
Just when you thought, things couldn't get worse for Satyam Computers, they do. The Upaid lawsuit in Texas, US, seeking over a billion dollars in compensation and also punitive damages (BTW, Texas is famous for giving fantastical awards in punitive damages), gets an updated application to restrain Satyam from frittering away its assets. I have blogged...

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Forged SEBI letter, novel fraud

Posted by Sandeep Parekh at 
This must set a new record for innovation in securities fraud. See the SEBI press release which is self explanatory: " PR No.327/2008 Clarification on news reports relating to Pyramid Saimira Theatre Ltd. It has been widely reported in the media that SEBI has vide order dated December 19, 2008, directed Mr. P S Saminathan , the CMD of Pyramid Saimira...

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Lawsuit against Satyam for over $1 billion

Posted by Sandeep Parekh at 
For those very curious and able to digest legalese, I was able to dig out some court filings in the Texas court by Upaid against Satyam Computers. The suit could result in upto a billion dollar recovery for Upaid. Here are the alleged facts of the case and here is the original (amended) complaint of Upaid in a pdf file: Amended Complaint.pdf Apparently...

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Regulatory appointments in the US and India

Posted by Sandeep Parekh at 
While the former head of NASDAQ stock exchange Madoff is in jail for carrying out the biggest financial fraud in modern history, the former head of NASD Mary Schapiro, its regulatory arm (and now Finra) is set to become the head of the US Securities and Exchange Commission (SEC). With an outstanding record in law and finance and having spent a successful...

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Satyam Board - thy name is mud

Posted by Sandeep Parekh at 
Seems we were all barking up the wrong tree - rather the wrong shrub. There is something far more sinister which has occurred in the self dealing proposal. This is based on a CNBC report I saw yesterday which does not seem to have seeped in at all in the rest of the media - even much of CNBC analysis. First, of the so called 6800 acres of 'land...

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Satyam - name and reputation are upside down - 2

Posted by Sandeep Parekh at 
Compensation of independent directors In case you are curious, here is the list of the independent directors of Satyam and what they were paid last year for attending 3 to 4 Board meetings: Prof. Krishna G Palepu (non-independent but non-executive member) (Harvard Business School) Compensation: 91,91,000 + 5,000 shares sold at nominal value of Rs. 2...

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