Hold the auditors to account

Just as Satyam has dented the image of the Indian IT industry, Price waterhouse Coopers, the auditing firm, has sullied the fair name of the accounting profession (BT cover, February 22). Worse, it’s not the first time that PwC has flouted the ethics of its profession. In 2005-2006, the same firm was mired in another accounting scandal related to the Global Trust Bank. Isn’t it time that a final verdict on the accounting firm’s acts of omission and commission be known?

—M. Kumar, through e-mail

On fraud’s trail
A fraud of Satyam’s magnitude (bt cover, February 8) could not have been possible without the connivance and complicity of politicians. And Andhra Pradesh has no dearth of powerful and crooked politicos. Many of them were overly indulgent towards Satyam and its Founder, B. Ramalinga Raju. Politicians of all hues are believed to have been not just the beneficiaries of Raju’s wheeling-dealings but also benami partners in many firms of Raju-promoted Maytas. With such powerful hands in the Satyam till, one wonders where investigations into Raju’s shenanigans will lead to? Perhaps, it will meet the same fate as the investigations into the Global Trust Bank or the CRB Group.

—Jayasankar Chidambaram, through e-mail

Asatyamev jayte
The Satyam scandal has bruised the faith of investors who bought into India’s economic success story. Like the Shakespearean character Macbeth, whose vaulting ambitions caused his own undoing, Raju brought about his own nemesis by overreaching himself. Like Macbeth, Raju had no spur to prick the sides of his intent, but only vaulting ambition, which overleaps itself, and falls on th’ other... Given the extent and the scale of his murky dealings, “all the perfumes of Arabia will not sweeten his little hand” with which he orchestrated the disgusting fraud on his company, its employees, creditors and shareholders.

—Charu Shah, through e-mail

Credit-crunched Times
This has reference to your thought-provoking write-up Why Banks Still Won’t Lend? (BT, February 8). Indian banks well realise that holding up cash goes against profitability. And so credit has to flow and it devolves upon banks to ensure that industry is not starved of capital and liquidity. However, several factors, including high-weighted average cost of funds and increased credit risk due to increasing defaults on credit cards and personal loans, are making banks more risk-averse these days. Lending risks are also getting exacerbated on account of rising unemployment, falling home prices and growing loan delinquencies. In the circumstances, the importance of raising consumer confidence is now egregiously outweighed by our need to raise creditor confidence. Given the perception about the economic climate today, can we really blame banks for not lending to consumers and companies whose ability to re-pay loans is under a cloud?

—Vinod C. Dixit, through e-mail

With a ciggy in his mouth
I am an Avid reader of your magazine and though I am in Dubai, I make it a point to get the issues whichever way possible. The picture of Vijay Mallya on the cover (BT, December 14, 2008) puffing a cigarillo was definitely not in a good taste. It doesn’t befit a man of his calibre to be portrayed smoking on a business magazine’s cover. Mallya is a well-known personality in business circles and you should have exercised prudence in depicting him the way you did unless you wanted to show him in a poor light.

—Shaikh Masood, through e-mail

Corrigendum
In the story Crisis of Consumption (BT, February 8), in the table depicting declining US economic growth, the entries for Q4 (’07) and Q3 (’08) should be read as negative figures—below the base line rather than above the line as they are inadvertently shown. The error is regretted.

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