Wednesday, January 14, 2009

Satyam Rearranges Governance Chairs on Titanic

Satyam Computer Services (SAY) new board named Deloitte Touche Tohmatsu International and KPMG as auditors to replace PricewaterhouseCoopers. The senior culprits are under arrest in India. While corporate and criminal law in India may be different than US statutes they do not condone fraud and stealing.

So from a governance point of view the question becomes what happens to the audit committee of the Board of Directors and the senior auditors of PricewaterhouseCoopers.

Can they all claim that they have been duped? They were hired so that they would not be duped. We need to see more arrests and prosecutions. These guys drove the get-a-way car well enough for this fraud to go undetected for close to five years. That’s pretty good driving and we need more than a speeding ticket.