While the Satyam saga is the biggest corporate goof-up in recent times, there have been copious occurrences of other tech frauds both locally and globally. Kumar Saurav presses the rewind button
While the Satyam saga is the biggest corporate goof-up in recent times, there have been copious occurrences of other tech fraudsu00a0both locally and globally. Kumar Saurav presses the rewind buttonEnron
From employees to investors and corporate giants, everyone was shocked by the Enron cave-in, which once lead the energy commodity market in the world. When the US government in early Nineties deregulated the sale of electricity, the energy market suddenly saw price volatility due to increased competition. Enron had created offshore entities - Bob West Treasure, Jedi and Hawaiiu00a0for tax planning and avoidance, thus raising profits from shared prices. Prosecutors accused the firm of pocketing 40 million pounds of investors' money. During the court proceeding, Andrew Fastow, Enron's former finance chief, testified that many of the bank transactions were manufactured, and misleading pacts were made solely to show higher profits and cash flow. Kenneth Lay, the founder of Enron, was charged with 11 charges of securities fraud.
WorldComThe US telecommunications giant was accused of faking revenues of close to $11 billion. The account executives at the organisation were found mentioning expenditures made on computers maintenance under the assets section of the balance sheet. The expenses were not reported on time, which kept the profit and revenue levels at unjustified levels. In June 2003, when the Securities and Exchange Commission (SEC) filed civil fraud charges against the firm, the intentional errors were estimated at $9 billion. When the organisation filed bankruptcy, shareholders lost $200 billion.
Computer AssociatesTwelve years of imprisonment and $8 million fineu00a0that's what a Brooklyn court in late November 2006 sentenced former chairman and CEO of Computer Associates International Sanjay Kumar to. Forty-four-year-old Kumar was found guilty of a $2.2-billion accounting deception, which cost the shareholders of the software manufacturing company over a $400 million loss.
DaewooIn May 2006, the founder and former chairman of the automobile producer, Kim Woo-Chong, was sentenced to a decade long captivity by Seoul Central District Court on $100 million embezzlement and book-keeping deception charges. Kim was charged with secretarial swindle, illegitimate financing and rerouting funds out of country. According to reports, the Korean court also ordered the auto-magnet to pay back $22 billion to shareholders.
| Phir bhi hope hai! |
According to IT experts, brand India has come under the scanner after the Satyam scam, but the industry stands united to survive the damage. "Just because of one man, the reputation of the entire industry shouldn't be put at stake. We are foregoing financial gains and poaching for sometime, and thinking about the long-term benefits of the industry," says Samir Dadia, MD, Saama Technologies.
Vijay Mukhi, president, Foundation of Information Security and Technology, seconds the opinion u2014 "Since long, I have been asking IT firms to use technology in the accounting process, because that's the only way to guarantee a fraud-free accounting system. But the companies didn't buy the idea." Guess, now they will. |
