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Source: http://www.business-standard.com/article/economy-policy/in-case-of-satyam-
issue-is-not-just-about-money-but-biz-ethics-109051100040_1.html
December 2009, India faced its biggest shakeup in the realm of corporate governance
and ethics in the Satyam debacle. In the very same month, the curtains closed on
Siemens AG’s bribery scandal with the corporation pleading guilty to the charges
brought against it under forty counts of the US Foreign Corrupt Practices Act (FCPA) by
settling at a record amount of $800 million towards fines, disgorgement of profits etc.,
Other than violation of books, records and internal control provisions, the charges of
anti-bribery offences ranged across multiple continents, involving subsidiaries in
In cooperating with investigations in Germany and USA, overhauling its top leadership,
centralising its compliance operations and revamping its anti-corruption controls and
regime, Siemens compliance procedures are today a case study and role model . A
Ultimately, as in the case of Satyam, the issue is not just of money but of business
ethics. With opening of borders, liberalising global investments and trade have led to an
password for a wide range of costs including kickbacks and bribes. From time to time,
There are several major international conventions, the OECD Convention of December
1997 on Combating Bribery of Foreign Public Officials in International Business
Transactions being the earliest. India is a signatory to the United Nations Convention
Against Corruption (UCAC), established in 2005, but has yet to ratify it.
There are also various voluntary organisations such as Transparency International with
powerful members, which have been party to anti-corruption instruments, and key tests,
for distinguishing soft and hard corruption between bribes, gifts and consultancy
payments, and acknowledging that in certain countries some of these are a must for
basics. However, none of these have been effective, largely because they lack an
Most conventions require each member nation to devise a code of conduct for public
officials, complemented by preventive measures in order to ensure an ethical business
India also has anti-corruption and anti-fraud laws, such as the Prevention of Corruption
Act, the Prevention of Money Laundering Act and Rules thereunder, as well as various
checks under the SEBI Prohibition of Fraudulent and Unfair Practices Regulations,
2003. Yet the Satyam fraud happened, and became public knowledge, not because of
The government stepped in and in exercise of its powers under the Companies Act,
1956 replaced the board with high profile independent professionals . Its another matter
that even earlier there were reputed independent directors on the Board which did not
prevent the downslide. The role of the new board was temporary and transitory, to
facilitate a takeover in order that the company and its business could survive .
On date there is a new management and owner, but that does not obliterate the
implications of the multicrore fraud being perpetrated, no less a serious white collar than
The Serious Fraud Investigation Office (SFIO) was recently set up under the Ministry of
Corporate Affairs inter alia to look into cases of substantial involvement of public interest
But to make the turnaround and reinforce faith in investors, both Indian and foreign, is in
the hands of the acquirer. The acquirer has to put in place transparent mechanisms of
business ethics and corporate governance on the lines of Siemens to proclaim to the
world that Satyam has truly emerged from the fraud era to one which befits its name.