Satyam Fiasco and Legal System

The recent fiasco in the Satyam case has brought out some serious issues that could have long term judicial implications.

To begin with, a case of the nature demands that there is coordinated action amongst the various agencies. I am not suggesting that it did not exist but what intrigues me is the fact that the capital markets regulator and the SFIO have been consistently denied access to question the accused for close to a month. This leads one to an inevitable question if there is more to it than the eye meets! One surely is not absurd to wonder if SEBI and SFIO should be entitled to it. In this case the market loss is in far in excess of Rs 7000 crores of the alleged fraud. Second if even in such cases the local CID with its archaic systems is going to get precedence for investigations then our law makers must have been naïve to have thought of the SFIO.

Compare this with what happened in China in the case of the melamine in the milk. The case that was first reported only a couple of months back but the trial has already been completed and the guilty convicted including a death sentence for a couple of them.

The other aspect was the arrest of the auditors of the company. I am not defending them at all but upset at the gross abuse of the judicial process. How else will one explain the arrest on a saturday evening knowing fully well that they will not be in a position to obtain a bail over the next two days being public holidays. The other aspect relates to the statement of the investigating officer. In the absence of access to the FIR one has to take it as the reason. The reason attributed was that they did not perform their responsibilities as external auditors! That would warrant action under the Companies Act and professional disciplinary action and not action straight away under the criminal procedure code! If lack of accountability can warrant action of the nature suggested we need to take some actions straight away. First let us all walk around with anticipatory bails and second the governments need to obtain budgetary support for expanding the capacity of all prisons! Well surely could classify as infrastructure projects during recessionary times!