India: Gigantic corporate fraud at Satyam Computers deals body-blow to Indian elite’s global ambitions

By Deepal Jayasekara and Kranti Kumara
published at the World Socialist Web Site

India’s fourth-largest information technology (IT) company, Satyam Computers, is on the verge of collapse following its chairman’s admission that for “several years” he fraudulently misstated the company’s financial position, including cash on hand, revenues, profits and debt load.

In a January 7 letter to the company’s board of directors, Satyam Chairman Ramalinga Raju said the company had US$1 billion less than claimed in its most recent quarterly report.

Satyam’s share price has since fallen almost 90 percent and, in a desperate attempt to avert Satyam’s outright collapse and reassure investors, the Indian government has replaced the company’s boards of directors and promised a thorough and far-reaching investigation. The now-defrocked Satyam chairman, his brother and Satyam managing director, Rama Raju, and the company’s chief financial officer, Srinivas Vadlamani, have been arrested, as have two PwC (PricewaterhouseCooper) auditors.

Global crisis & Marx

By Simon Caulkin

TO piece together the fragments of today’s worldwide crisis is to grapple with a sense of deja vu. The sweep of globalisation; strident inequalities (the Financial Times recently ran a breathless piece about the Bond-style security mechanisms built into the luxury homes of the international superclass — alongside stories of food riots); vast intervention by central banks to prop up the banking system; the origin of the crisis in the explosive mixture of masters and leftovers of the universe — what does all this remind you of?

It takes a reading of Francis Wheen’s concise and lucid Marx’s Das Kapital — a biography (Atlantic) for the penny to drop. The cantankerous ghost hovering over the global turmoil and glorying in the discomfiture of its chief agents is that of London’s Highgate Cemetery’s most eminent denizen and the UK’s great revolutionary.

The sense of the grinding of the gears of history, the shifting of the political and economic plates, comes straight from Karl Marx (although some might also want to add an element of Groucho). When the governor of the Bank of England talks of protecting people from the banks, and plaintively recommends that graduates should consider a career in industry as well as the City of London (financial sector), shimmering eerily through his remarks is the Gothic vision of alienation and auto-destruction that Marx outlined 150 years ago.

‘Financial globalisation can reinforce Islamic finance’

KARACHI: Dr Shamshad Akhtar, Governor, State Bank of Pakistan (SBP), has said the Islamic financial services industry needs to consolidate itself to be able to better compete with global players through achieving scale efficiency and cost effectiveness in addition to rapidly building its capacities to standardise regulation, supervision and accounting practices, while strengthening the governance of the industry.

Delivering her keynote address as the Chairperson of the Islamic Financial Services Board (IFSB) on “Financial Globalization and Islamic Financial Services Industry” at the 5th Annual Summit of the IFSB held in Amman, Jordan, Dr Akhtar said the Islamic financial services industry has been transformed from being a peripheral activity to a sizeable industry which is attracting global interest.

She said financial globalization would foster this industry and given the inherent features and richness of Islamic principles, modalities and products’ growth, it would be beneficial for supporting the process of regional and global financial deepening. Although currently the size of the industry is small relative to the global financial system, it has promising growth prospects, she added.