Next big corporate tree to fall?

[The Crackednut]

We saw Enron.We saw WorldCom, and now we are seeing a whole lot of evidence of corporate crimes all over the world. And can India be left far behind? Which big company, do you think, will be the next to cash in ....erm, or cash out on this new-found trend ??

[lucifer in disguise]

chandra babu naidu

[vivek of themavericks.. remember!!]

Nice topic to discuss,i would like more like these in fullhyd.Well,ets put in prespective.Worldcom scam and the likes of it is not actually about physical disappearence of money o capital.Its about relocation of the money in a different catagory in the balance sheet,in such a way that it would paint a rosier picture to the shareholders.When such a thing happens,the company would be able to remain in a position that would satisfy the expectation of the markets.Well,in this case its the NYSE and DOW(index).But manupulations in the balance sheets can go on only for a short time,it simply can`t be a continous process.This is exactly what happened in the ENRON scandle.The dynamisms of Worldcom and Enron are different but at the end of the day its all about manupulation \"according to standard accounting procedures\" in the balance sheet and P&L statements.Most of the companies would like to convert the \"internal revenues\" as sales in a strategic way.That way the turnover would increase,so this can be translated in the a higher Market CAP.Now the question of which indian company would go that way?,well,my answer clearly is-many many companies.Its just that we don`t have a comprehensive and effective monitoring system that would play the role of a watch dog.SEBI has merely been reduced as a statutory body compared to SEC of USA,which is being stricter than ever.This strictness is what caused XEROX come out clean!.I have done fair amount of analysis and i am confident of stating that almost 60% of indian companies indulge in manupulation to \"appear\" financially sound.Shall i name one.... naa ...forget it...ok heres hint...it the first corporate hospital and healthcare chain!!....got it??.More details subject to response in this board

[ravi]

hey vivek , please do name the companies which u know so that nobody will do the mistake of investing in such companies.I am really interested in knowing which companies in india are involved in such manipulations.

[ravi]

does this mark the beginning of corporate fall down in USA?

[vivek of themavericks.. remember!!]

You see there are many Indian companies that indulge in these kind of accounting manupulations.Infact,if you would belive me,pne of main reasons of hiring auditors is to make such manupulations legitimate!.I can give you some specific names,but its not proper.Just take another hint-the largest FMCG corporate in India.Infact,corporate trees fall because they become to exited with their developements in certain regions in the world.India is one of the most admired places for business developement(read back office developement).Most of these companies are here by signing the agreement with the govt of india to release an IPO with in a certain time frame.Eg CoCa cola,they are dodging the IPO release stating that they have been under loss since the last three years in india!!! can you believe it.how do you thing this happens.All these drama is just avoid following different accounting practices in different countries and rather follow a centrally adapted practice.Its highly unlike to have such a hue and cry in India as it is the case in USA.More soon!

[ravi]

got real good information vivek.