Lawyers and accountants (caught) breaking their silence

Lawyers and accountants (caught) breaking their silence

Our corporate sector and key intermediaries, like lawyers and
accountants, follow a nice code of silence when it comes to doubtful
practices. But a batch of WikiLeaks cables released on 26th August
shows that they are frank and loquacious in briefing US diplomats.
After the Satyam Computers scandal, these honchos told Mumbai
consulate officials how corporate governance at family-controlled
local companies was ‘an illusion rather than reality’ and that firms
were reluctant to appoint ‘truly independent directors’ who would
challenge management decisions. A financial expert mentioned a
corporate takeover where an acquisition price of Rs1,000 per share was
publicly announced while owners were paid an additional Rs600 per
share into a Swiss bank account. Rumours of such deals abound around
major mergers & acquisitions. Lawyers, accountants and
investment-bankers—who were making candid disclosures to US diplomats
facilitate these deals. Shishir Tamotia, CEO of Ispat Energy, a
subsidiary of the controversial JSW Ispat Steel Ltd owned by Pramod
and Vinod Mittal (acquired by Sajjan Jindal) said, “most businesses in
India are run like Satyam, with little regard for true governance.” Mr
Tamotia probably saw many strange practices close-up, also said that
shareholders are usually unconcerned as long as stocks keep rising.
Darius Shroff of Crawford Bayley & Co told the diplomat that ‘revenue
fraud’ and dubious practices in transfer pricing and asset valuation
was more ‘rampant’ in Indian companies than outright frauds like
Satyam. All in all, top corporate executives painted quite a sorry
picture about Indian companies to the US consulate—now, if only they
dared to voice these opinions in public meetings and seminars, it
would ensure better corporate governance, accountability and
transparency. But then, it would also mean less corporate business for
them.