Happy New Year 2009 everybody. For Satyam (SAY) shareholders this new year does not look happy at all. The chairman of the company came out with a confession letter yesterday detailing how he kept the profit books cooked for several years at the company.
It is sad to hear to this and your blood will boil if you happen to be a shareholder of Satyam, either in the Indian markets or the ADS listed on NYSE (SAY).
The auditors (PWC) are definitely getting chastised by many people, but now the board members will also be clearly under scrutiny. More details are emerging too, ranging from missing bank statements, to the real meaning of the insider transactions (sales of shares) in Sep 2008, by top mgmt.
While some say (sorry) that this will tarnish India's shining image of growth and affect outsourcing, I feel that a knee jerk reaction would not last long to affect business with India. What might really happen is a closer scrutiny of the entire business model in India and a consequent improvement in corporate governance and a healthy skepticism at profit bubbles.
What really caught my eye was this phrase from the confession:
"It was like riding a tiger, not knowing how to get off without being eaten" (link to the scanned letter)
There you go, he has himself given suggestions towards the kind of punishment that may be meted out to him. Get a tiger (man-eating or non man-eating, Indian or Siberian), find a forest and then set him on the tiger and of course, track him with a webcam attached to a bird. J/K, but you have to have a small chuckle at the guts of this guy (R. Raju) to in giving analogies when talking about billion dollar losses.
If you want to follow more discussion on SAY, you can visit some popular South Asian blogs - Sepia Mutiny and Indian National Interest.
Showing posts with label NYSE. Show all posts
Showing posts with label NYSE. Show all posts
Jan 7, 2009
Sep 19, 2008
Short Selling Ban
Update: An official from the SEC called me at 9:35 am and informed me on the clarifications that I had sought. Those answers are added below my questions in this post in BLUE COLOR. I will have to say that I am impressed with the fairly quick response (within 30-40 mins) by this government agency. I am happy that the response was quick, although I question the logic of the SEC's decision on banning shorting. What they should have done is merely get the uptick rule back in place, that's my personal opinion on this issue. Please read on.
Dear Chairman Cox
REFER: http://sec.gov/news/press/2008/2008-211.htm
What they did not add but I am saying is that, they might cover you if you are in the league of Bare Sternums or Fanny May or Fretty Mac (BSC, FNM, FRE). Names misspelled on purpose.
This email may not sound very professional, but I need the clarifications as soon as possible, at least before 930 am.
Thanks a lot.
A concerned investor
Investor in NYSE, NASDAQ, AMEX.
Phone
Currently residing in the state of _____________
FINANCIALS AS IN:
for the blog alone: purely financial companies as in the ones that just push paper form one place to another and do not add any real material value or create any goods. Companies that are just middle men, that get to hold your money for 3 business days or charge you wire transfer fees for moving your money immediately. Or companies that charge 21% interest for providing your loans more than 20 days (for purchases) or 23% interest for cash loans the moment you take them out.
END OF POST, please feel free to add comments
Dear Chairman Cox
REFER: http://sec.gov/news/press/2008/2008-211.htm
I need some immediate clarification regarding SEC ruling 2008-211. In fact I *desperately* need the clarification before markets open today at 930 am. My question is this, the SEC has banned short selling of financial securities till Oct 2 as I notice in the ruling. Q1) Does this affect companies like General Electric (GE) (as an example) that have substantial financial sector involvement. Or does it involve only the purely financial companies?
>> Read funny note at the end on financials.
>> Read funny note at the end on financials.
Q2) SUPER IMPORTANT: If I am short on any financial security as of yesterday (i.e not a newly initiated position but a previously held position), do I need to cover or can I continue holding that position short?
>>the SEC has not issued any guidelines on existing short positions. As long as are legally short, it is your decision alone to hold or cover.
In case I do not cover, will the SEC or the Treasury guarantee my margin position even if the stock price rockets up?
>> The SEC or the government will not guarantee any margin positions of individual investors.>>the SEC has not issued any guidelines on existing short positions. As long as are legally short, it is your decision alone to hold or cover.
In case I do not cover, will the SEC or the Treasury guarantee my margin position even if the stock price rockets up?
What they did not add but I am saying is that, they might cover you if you are in the league of Bare Sternums or Fanny May or Fretty Mac (BSC, FNM, FRE). Names misspelled on purpose.
I am also concered if the Stock exchanges will halt trading if the rise is too fast in the indexes (they did this in RUSSIA yesterday).
>> No comments on this issue.This email may not sound very professional, but I need the clarifications as soon as possible, at least before 930 am.
Thanks a lot.
A concerned investor
Investor in NYSE, NASDAQ, AMEX.
Phone
Currently residing in the state of _____________
FINANCIALS AS IN:
for the blog alone: purely financial companies as in the ones that just push paper form one place to another and do not add any real material value or create any goods. Companies that are just middle men, that get to hold your money for 3 business days or charge you wire transfer fees for moving your money immediately. Or companies that charge 21% interest for providing your loans more than 20 days (for purchases) or 23% interest for cash loans the moment you take them out.
END OF POST, please feel free to add comments
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