Founder of Satyam Ramalinga Raju and his brother Rama, also a former Satyam director, were arrested on charges including criminal conspiracy and forgery. Mr. Raju admitted that the firm has been falsifying its account. He said the company has exaggareted its account by almost $ 1 billion. The timing of such a scandal could not have been any better for India and the rest of the world. Just when people were loosing their trust on capital market, world economy was going into a long recession such flawed corporate governance has only hit the already wounded world economy. If you see some of the recent incidents which led to the fall of the free market economy, all of them has one common thing - 'Unethical practises' . The crash of the U.S housing market which led to the fall of Lehman Brother, Fannie and Mac, Bear Sterns all because some greedy executive wanted to take all the advantages of the housing boom that was going on not keeping in mind wheather or not the credits that has been given out will ever see the day of light. Consumers had very little to complain to the mortage companies free way of accepting almost everyone who has a minimum amount for a deposit to buy a house. Until, consumers failed , banks were stuck and big brothers such as Lehman Brothers , Bear Stearns had nothing but 'toxic assets' in their had. From then on it has been a domino effect in the Financial sector from banks, insurance to Private Equity companies has fallen victim. Just for those few on the top, their greed for more money and control of the market has put the housing bubble to burst and the people to default on their mortgage. Unethical practices has a long list all around the world for which the capital market, people's savings and the whole economy of a nation can come to a crisis. But in Bangladesh, very few or rather in small scale ones ever see the day of light. Excluding the Seimens bribe scandal which is a multi-national company and the reason it came out was because of a U.S anti-corrption and bribery inquery. I am sure if a thorough accounting and financial audit of large local firms which are listed in the capital market are done, many hidden skeletons will come out. The Securities of Exchange commision the watchdog of the capital market has done quite alot of things and has safeguards for the shareholders, but is it enough? Such watchdogs and safeguard policies were also in place in the U.S capital market and also India. Look how that turned out. Until the businessmen of Bangladesh does not act on Moral Ethics very few watchdogs or policies can stop them from keeping their shareholder in the illusion of inflated profits and high share prices. Look at the local commodity market, Steel market , Fertiliser market - inflated prices. All these can be achieved whena group of greedy businessmen decide to hold hands and take the market for high price ride and enjoy the profits off the poeple's hard work and pain. Business Ethics should be understood and taught at business school all around Bangladesh. Awareness of ethical practices should conducted at all the business organization and institutions.
I think Bangladesh's Corporate scandals ( financials ) are all hidden in the closet with a veil around it which reads loudly of their patritiosm and loyalty to the people. The examples of illegal activities by major telecom companies are still fresh in our mind. Those were just the tip of the iceberg. But will the whole iceberg ever come to light?