By Dr Sanjay Chaturvedi
Accommodation Times News Services
What made Raju confess the arbitrary figures in balance sheet? What role board of directors payed in the assumptions? How come PriceWaterCooper, auditors ignored the basic methods of audits? What relations Maytra Infa having with board of Satyam?
These are questions circulating amongst investors, shareholders, agencies and government. When R. C. Sinha regined from the chairmanship of Maytra Infra, which got the contract to built Metro in Hyderabad from Chandra Babu government, it was more clear that fraud took place just not within the four walls of Stayam’s board room but having political vested interest. R. C. Sinha was responsible for CIDCO’s success story. MSRDC and many such organisations in Maharashtra. The learned retired IAS officer also was heading Nagpur MEHAN, SEZ and Airport. What made R.C. Sinha resign from the chairmanship is now clear. Raju’s son, who was vice chairman of the real estate company, which was to be taken over by Stayam, caught in the fire when Stayam’s shareholders rejected the loss making transaction.
It would have another ten years for false balance sheet exposure had it not been rejected the offer of merging of Maytra Infa. PwC, the auditors, having world renowned reputation carry best business practice and strictest audit procedures. In L&T, for instance, every project above Rs.25 crore a pre audit and material disclosure is must before taking it up for operations. A skip from basic vouching of figures like bank balances and cash-in-hand is not acceptable. Manipulation of bank statement, which are now missing from Stayam’s office on which the PwC had certified the figures, had revealed the banking system scam in the country. Normally, bank statements do not come with signature, as such, computer generated statements are handed over to the clients. Scam of such magnitude involves not only the accounts officers, chairman and who so ever is responsible for putting the figures but also external forces and associates like bankers.
Real estate is the major culprit for Stayam becoming Astayam. The valuation of its assets class is also a must under the circumstances. A scam with the conspiracy of internal and external associates have exposed how corporate India is venerable to fictitious practices for cosmetic surgeries of balance sheets. IT companies ‘buying’ the turnovers, manipulation of sources of funds and net-worth in name of goodwill must be stopped at once. Authorities must ensure revalidation of figures by independent auditors and such steps to ensure no other Stayam become Astayam.
We dont know how many Stayam are in offing. Fund houses, Venture Capitalist and Hedge Funds are dying hard to fund Real Estate which is showing no sign of recovery. Huge supply mounting and there are no takers. Land parcels have become unimaginable figures and almost all politicos are in the game.
The rally of funding dead woods may end soon and funds are now in the exit mode.