In President Bush's final official news conference today, he surprised the crowd (and America at large) by acknowledging some of the mistakes of his presidency. He figuratively passed Obama the reins and cautioned his successor to expect some disappointments of his own while in office. Which is to say, you'll be disappointed when you can't clean up the incomprehensible mess I've left behind.
Satyam is now going through a similar transition, tasked with appointing a new board and new leaders, restating the firm's accounts and picking up the pieces left scattered on the floor after Chairman Ramalinga Raju's startling admission of fraud last week. The company's shares optimistically jumped two-thirds today, in anticipation of the new board's custodial skills. As it stands, Satyam is valued at $475 million, down from over $7 billion in mid-2008.
Raju and his brother, co-founder Rama Raju, were taken into custody, and will watch the story unfold through iron bars. India is sure to take the hard line with the Raju duo, as it's now trying to reassure itself and global investors by adhering to strict governance regulations and upholding a zero-tolerance stance toward corporate fraud. The American judicial system, meanwhile, seems to be taking a more laid-back approach to its most beloved criminal, having ruled to allow Madoff to remain free (free to roam his Upper East Side penthouse apartment wearing an ankle monitor, that is) after he violated a court order by mailing his family jewels (literally) to others for safe keeping.
Another source of stress for the newly inaugurated Satyam board: the World Bank's announcement that it has blacklisted Satyam (for eight years!) due to "improper benefits to bank staff." Satyam had been kicked off the roster of companies the World Bank will work with back in September, but the organization only publicized the news in December. Joining Satyam in the detention room are Indian compatriots Wipro and Megasoft Consultants.
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