Whether it was Enron, Worldcom and now Lehman, Madoff in the US, Hyundai Motor in South Korea, Livedoor in Japan, Parmalat in Italy or now Satyam Computers in India – someone, somewhere failed in their duties to protect investors who lost their monies and employees that lost their jobs.
Am not even touching the aspect of governance, transparency, ethics and the roles of CEOs/CFOs here.
The Enron scandal even led to the collapse of its auditors Arthur Andersen. SEC settlement with two Arthur Andersen partners in case of Worldcom was also much debated. Last year PwC had a $225 million class-action case settlement with investors of Tyco International. There have been several other small audit fraud lawsuit settlements. Does it just stop here?
Auditors, analysts and rating agencies are all directly and indirectly supposed to be working to protect the interests of shareholders and lenders of a company. Respective accountabilities and punishments for defaults have to be in place and no one who betrays this trust should go scot-free.
Relevant apex institutions need to take an urgent look at their reporting and disclosures norms.
