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Vijay Mallya, Subrata Roy, Nirav Modi, and Ramalinga Raju— these are the four Bad Boy Billionaires of India

<ul><li>A number of auditors are ending their relationship with clients amid high scrutiny from SEBI. </li><li>According to the Ministry of Corporate Affairs, the auditors of as many as 204 companies have submitted their resignations in the year so far. </li><li>In January 2018, SEBI slapped a two-year ban and fine on PwC for failing to report the corporate malfeasance at Satyam Computer Services.</li></ul>When it comes to <keyword id="6373268" type="TOPIC" weightage="20" keywordseo="Corporate-Governance">corporate governance</keyword>, India has seen its fair share of scams related to questionable business dealings, balance sheet discrepancies and embezzlement. The most recent debacle that comes to mind is that of ICICI Bank, the country’s largest private sector lender. The bank’s CEO, Chanda Kochhar, is currently being investigated over allegations of conflict of interest and misconduct. She reportedly allowed the extension of loans to Videocon Group, the former chairman of which had a business relationship with Kochhar’s husband. While India Inc has had a tenuous grasp of corporate governance standards, it has never seemed to be a problem for auditors who weren’t subject to very heavy regulatory scrutiny. Until now, that is. At the beginning of the year, the Securities and Exchange Board of India (SEBI) slapped <a href="https://www.livemint.com/Companies/KlbBm6VhxhQQswdgT9bycK/Satyam-case-Sebi-bans-PwC-entities-from-auditing-listed-fir.html">a two-year ban and a fine </a>against the Indian unit of PricewaterhouseCoopers (PwC) for failing to report and facilitating the corporate <keyword id="38935" type="PERSON" weightage="20" keywordseo="Fraud">fraud</keyword> at Satyam Computer Services, founded by the now-imprisoned Ramalinga Raju, which was revealed in 2009. While PwC is challenging the ban, the damage has been done. Auditors now have no choice but to recuse themselves in situations of corporate malfeasance for fear of reputational damage and punitive action. A mass exodus According to the data from the Ministry of Corporate Affairs, <keyword id="6359983" type="UNKNOWN" weightage="20" keywordseo="Accounting">accounting</keyword> firms of as many as 204 companies have submitted their resignations from the beginning of the year to 17 July. Around 75% of these resignations came in the corporate strongholds of Mumbai, Delhi, Kolkata and Ahmedabad. In comparison, only 16 auditors submitted resignations in 2017. In a number of cases this year - such as the resignation of Deloitte as the accountant for Manpasand Beverages Ltd - the resignation came days before the annual accounts were scheduled to be released owing to inadequate information. The resignations have not gone unnoticed by shareholders, based on the declining share prices of companies like <a href="https://www.google.co.in/search?ei=qdRWW5_PDIbavATQxbCQAg&amp;q=Vakrangee+Limited+share+price&amp;oq=Vakrangee+Limited+share+price&amp;gs_l=psy-ab.3..0l5.1607.3010.0.3104.13.9.0.1.1.0.337.1365.0j1j2j2.5.0....0...1c.1.64.psy-ab..8.5.1145...0i22i30k1j0i10k1.0.XUhs6OVQ2Ng">Vakrangee Ltd</a>, an IT services firm whose <keyword id="6437332" type="UNKNOWN" weightage="20" keywordseo="auditor">auditor</keyword> PwC quit at the end of January 2018. The Ministry of Corporate Affairs has initiated a formal investigation into this exodus and is looking to understand the underlying reasons. For its part, SEBI will continue its initiative to improve corporate governance standards across the country. At its <a href="https://www.sebi.gov.in/media/press-releases/mar-2018/sebi-board-meeting_38473.html">board meeting in March</a>, the regulator agreed to a number of reforms including the separation of the posts of CEO and chairman in listed companies and increasing the importance of audit committees. Earlier this month, it also released <a href="https://economictimes.indiatimes.com/markets/stocks/news/sebi-seeks-comments-on-fresh-norms-for-fiduciaries/articleshow/64995732.cms">a set of draft norms</a> giving it clear authority to act against accounting firms in cases of corporate fraud.

A spate of auditor resignations points to India Inc’s problems with corporate governance

A company and a society, linked to suspended Railway officials facing CBI probe in connection with alleged corruption in supply of packaged drinking water in premium trains, have come under the agency's scanner which suspects these were used for camouflaging illegal remittances received from private caterers. 
 CBI sources said Sandeep <keyword id="870324" type="PERSON" weightage="80" keywordseo="Silas">Silas</keyword>, a 1984-batch Indian Railway Traffic Service (IRTS) officer, has been involved in a project of his own, besides, being a very active player in the cultural scene of the national capital. 
 
The project run by Silas, Garland of Peace, has come under the scanner of the agency which will see weather any bribes were paid through it, they said, adding that all funds which came to the project and other cultural activities of Silas would also be probed. 
 
Sources said a company run by the son of M S Chaliam, another Railway officer facing CBI probe in the case, has also come under the probe of the agency. 
 
CBI suspects private catering companies could have paid illegal remittances to the officer through the company run by his son for alleged favours shown to them for supplying inferior quality of packaged drinking water on premium trains. 
 
The sources clarified that both the angles were at the initial stage of probe, which would be investigated in depth to arrive at any logical conclusion. 
 
CBI has registered a case against Chaliam, Silas and seven private companies - RK Associates Pvt Ltd, Satyam Caterers Pvt Ltd, Ambuj Hotel and Real Estate, PK Associates Pvt Ltd, Sunsine Pvt Ltd, Brandavan Food Product and Food World - under the provisions of Prevention of Corruption Act. 
 
During searches on Friday last, CBI had recovered Rs 27 crore cash from Shyam Bihari Agrawal, his sons Abhishek Agrawal and Rahul Agarwal, who own RK Associates and Brandavan Food Product. 
 
It is alleged that the accused officials had shown favour to these private firms in supply of cheap packaged drinking water other than 'Rail Neer' which is mandatory in premium trains including Rajdhani and Shatabdi. 
 CBI had said that the Railway Board had prescribed that <keyword id="65866" type="COMPANY" weightage="80" keywordseo="IRCTC">IRCTC</keyword> shall provide Rail Neer at the rate of around Rs 10.50 per bottle to private caterers and they would be paid (approx) Rs 15 per bottle for supplying the same to the passengers in premium trains. 
 
However, in order to make undue gains, the private suppliers were allegedly supplying cheap packaged water, other than "Rail Neer", available in the market at a rate of Rs 5.70 to Rs 7 (approx) per bottle, thereby making profits for themselves and loss to the exchequer. 
 
"The accused public servants allegedly did not take any action against the private parties providing catering services in premium trains despite repeatedly being informed by IRCTC about non-picking of allotted quota of 'Rail Neer' by them," CBI spokesperson said. 
 
CBI said the directions of Railway Board to ensure supply of "Rail Neer" in premium trains were also ignored by the officials thereby causing undue pecuniary advantage to the private parties and corresponding loss to the IRCTC. 
 
Image credit: Indiatimes

Rail Neer scam: CBI to probe company, society of railway officials

Three accused, who were arrested in connection with alleged corruption in supply of packaged drinking <keyword id="15300" type="ENTERTAINMENT" weightage="40" keywordseo="Water">water</keyword> in superfast trains, have now been sent to 14-day judicial custody by a Special <keyword id="6354572" type="ORGANIZATION" weightage="100" keywordseo="CBI">CBI</keyword> court today. 

	The accused were produced in the court after completion of their five-day CBI custody. 
 

	Special CBI judge Vinod Kumar remanded two senior rail officers -- Sandeep Silas and MS Chalia -- and a businessman -- Sharan Bihari Agrawal -- to judicial custody after CBI submitted that they were not required for further custodial interrogation.
 According to the probe agency, Silas and Chalia conspired with Agrawal and instead of taking <keyword id="62075" type="ORGANIZATION" weightage="100" keywordseo="Rail-Neer">Rail Neer</keyword>, they had allowed some private firms to supply water in trains which resulted in a loss of Rs 6.25 crore to the exchequer. 

	Searches were conducted in which about Rs 28 crore cash was recovered out of which around Rs four lakh was counterfeit, said CBI. 
 On Saturday, Silas, a 1984-batch Indian Railway Traffic Service(<keyword id="524330" type="ORGANIZATION" weightage="60" keywordseo="IRTS">IRTS</keyword>) officer, and Chalia of 1987 batch officer were taken into custody along with Agrawal, owner of R K Associates. The CBI has also registered case against seven private companies --- RK Associates Pvt Ltd, Satyam Caterers Pvt Ltd, Ambuj Hotel and <keyword id="6354553" type="COMPANY" weightage="40" keywordseo="real-estate">Real Estate</keyword>, PK Associates Pvt Ltd, Sunsine Pvt Ltd, Brandavan Food Product and Food World --- under the provisions of Prevention of Corruption Act. 
	 
	(Image: Indiatimes)

Three accused sent to 14-day judicial custody in Rail Neer scam

<ul><li>‘Challenge accepted,’ said Gurnani to <keyword id="15681942" type="General" weightage="20" keywordseo="chatgpt" source="Orion">ChatGPT</keyword> maker OpenAI CEO <keyword id="257641" type="General" weightage="20" keywordseo="sam-altman" source="Orion">Sam Altman</keyword> who had said it was totally hopeless to compete with his company on training foundational AI models.</li><li>Gurnani has taken a contrarian stance to that of the industry recently on the <keyword id="64527" type="General" weightage="20" keywordseo="moonlighting" source="Orion">moonlighting</keyword> issue.</li><li>He had created a unique approach to downsizing when his company took over troubled Satyam Computers. </li></ul>Come December, <keyword id="351287" type="General" weightage="20" keywordseo="c-p-gurnani" source="Orion">C P Gurnani</keyword> is all set to hang his boots as <keyword id="43217" type="General" weightage="20" keywordseo="tech-mahindra" source="Orion">Tech Mahindra</keyword>’s CEO, but that’s not making him take a back seat. Unlike most tech CEOs and other top leaders in general, he is unafraid to speak his mind. So much so that Gurnani made OpenAI CEO Sam Altman back down and clarify his comments that it’s hopeless for India to compete with his company on AI. The first to respond was Gurnani who ‘accepted a challenge’ on behalf of India — to create a ChatGPT-like product. “From one CEO to another, challenge accepted,” Gurnani said after Altman said, “The way this works is we're going to tell you, it’s totally hopeless to compete with us on training foundational models, you shouldn’t try and it’s your job to try anyways,” responding to a question on the capability of small team of Indians to try it. Altman’s comments, however, ended up reportedly offending the likes of minister of state for IT and electronics, Rajeev Chandrasekhar. Meanwhile, the 64-year-old Gurnani, never one to shy away from taking on challenges or voicing his opinions, however contrary — has taken the bull by the horn one more time. A votary of moonlighting Not too long ago, when moonlighting was a hot debate, almost every tech major including Tata Consultancy Services (TCS) and Infosys opposed it calling it an ‘ethical issue’. In fact, Wipro’s executive chairman Rishad Premji was a vocal opponent, claiming to have fired people for taking up side hustles while being employed with the company and ‘working’ from home. Amidst a sea of dissent, Gurnani was one of the first voices who supported moonlighting – only asking his employees to be open about it. He asked them not to cover up the extra work as it would aid their resumes. “If you go by my word, if someone is meeting the efficiency and productivity norms, and he wants to make some extra money as long as he is not committing fraud, he is not doing something against the values and ethics of his company, I have no problem. I would like to make it a policy. So, if you want to do it, cheers to that, but be open about it," Gurnani had said. ‘People were not toxic’ Such out-of-the-box thinking and policies are not new for Gurnani. After the shocking Satyam scam, where its founder admitted to falsifying accounts, Mahindra &amp; Mahindra bought the company and brought Gurnani to run it. Almost all the employees of the beleaguered company had turned persona non grata. However, he said, “The company’s accounting books were toxic, the people were not.” Amidst dealing with legal and regulatory issues, he did roadshows lasting many months to convince clients to stay with the company. However, as the immediate task was to improve profitability of the company, he had to do what he dreaded — fire around 18,000 people. The firing was not done at one go however. The company gave a small salary for six months, set up job fairs, trained them and even had psychiatrists to help tide over the crisis – until they found another job. As with moonlighting and the Satyam restructuring, Gurnani brings his unique perspective to artificial intelligence (AI) as well. The chemical engineer from NIT Rourkela isn’t worried about AI taking over human jobs – he believes it will give humans more leeway to create emotional connections and relationships, and of course bring in more creativity to work and life.

C P Gurnani and the contrarian stance

<ul><li>A Hyderabad civil court passed the stay order on a petition filed by Raju, who was released on bail in 2018. He sought orders to restrain <keyword id="128682" type="COMPANY" weightage="20" keywordseo="Netflix">Netflix</keyword> from releasing the web series on the ground that it would invade his privacy in an unlawful manner.</li><li>Raju also claimed that the narrative contained half-truths and palpably designed to bring down his reputation.</li><li>Netflix released the trailer of the web series which is about Vijay Mallya, Nirav Modi, Subrata Roy and <keyword id="41263" type="PERSON" weightage="20" keywordseo="Ramalinga-Raju">Ramalinga Raju</keyword>.</li></ul> A court in Hyderabad on Tuesday restrained Netflix from releasing web series "<keyword id="9827211" type="UNKNOWN" weightage="20" keywordseo="bad-boy-billionaires">Bad Boy Billionaires</keyword>: India" on the life story of Satyam Computer Services founder B. Ramalinga Raju who was convicted in Satyam scam and three others. A Hyderabad civil court passed the stay order on a petition filed by Raju, who was released on bail in 2018. He sought orders to restrain Netflix from releasing the web series on the ground that it would invade his privacy in an unlawful manner. Raju also claimed that the narrative contained half-truths and palpably designed to bring down his reputation. Netflix has already released the trailer of the web series which is about Vijay Mallya, Nirav Modi, Subrata Roy and Ramalinga Raju. "What would you do to make it to the top? To build an empire? To maintain an image? Bad Boy Billionaires answers just that. Dive into the stories of India's most infamous billionaires - Vijay Mallya, Nirav Modi, Subrata Roy, and Byrraju Ramalinga Raju as they plan, plot and maneuver through their rises and falls. Watch as insiders and experts discuss what made these men genius and, in some cases, the greatest conmen," reads the description by Netflix. A court in Bihar had last week restrained Netflix from using Subrata Roy's name in the web series. The over Rs 7,000 crore Satyam scam came to light on January 7, 2009 when Ramalinga Raju confessed that the company's account books and profits were inflated over many years to the tune of several crores of rupees. Police arrested him two days later on a complaint by some shareholders. The CBI filed three charge sheets against Raju and the other accused, charging them with cheating, criminal conspiracy, forgery, falsification of accounts and breach of trust. A special CBI court in April 2015 had sentenced him, his two brothers and seven others to seven years in prison in the case, said to be India's biggest corporate fraud. However, a month later, the metropolitan sessions court suspended their sentence and granted them bail. SEE ALSO: <a href="https://www.businessinsider.in/india/news/icj-raises-concern-on-sc-decision-in-bhushan-case-says-its-inconsistent-with-international-standards/articleshow/77885669.cms">ICJ raises concern on SC decision in Bhushan case — says it’s inconsistent with international standards</a>

Hyderabad Court stays release of Netflix's Bad Boy Billionaires: India following Ramalinga Raju's objections

New Delhi, Nov 18 () The Supreme Court on Monday stayed an order of the Securities Appellate Tribunal (SAT) which had held that markets' watchdog SEBI does not have the power to bar auditors.
A bench comprising Justices Arun Mishra and Indira Banerjee also issued notice on the appeal filed by the Securities and Exchange Board of India (SEBI) against the SAT's September 9 order. 
The SAT, in its order which set aside the ban on audit firm Price Waterhouse (PwC), had noted that SEBI does not have the power to bar auditors. 
Earlier, the SEBI had challenged SAT's decision to quash a two-year ban that was imposed on PwC in connection with the Rs 7,800 crore Satyam fraud.
On January 10, 2018, the watchdog slapped a two-year ban on Price Waterhouse (PwC), an arm of PricewaterhouseCoopers India, from auditing any listed company in connection with PwC's role in the Satyam scam.
The tribunal had quashed the order but partly allowed disgorgement of the Rs 13 crore fee from the auditors concerned.
The fraud at erstwhile Satyam Computer Services came to light on January 8, 2009 wherein the company's founder Ramalinga Raju publicly admitted to cooking the books to the tune of Rs 5,004 crore over a period of time. A SEBI probe had found that the scam was much larger at Rs 7,800 crore.
Setting aside the ban, the tribunal had said that only the Institute of Chartered Accountants of India (ICAI) can take any action against auditors and that frauds cannot be proved on the basis of negligence in auditing.
Among other observations, the tribunal had pointed out that SEBI has no authority to look into the quality of audit and auditing services.
"SEBI can only take remedial and preventative action. The direction issued is neither remedial nor preventive but punitive," it had said. PKS SJK 
 
 PKS RDM
RDM

SC stays SAT's order holding that Sebi lacks power to bar auditors

Mumbai, Dec 4 () Capital markets regulator Sebi on Wednesday said its actions against auditors for faulty audits are within its "Parliamentary mandate", and there is no question of "turf wars" on this issue.
 Sebi Chairman Ajay Tyagi said the watchdog is working only to protect the interests of investors and limiting its actions to auditors of publicly listed firms.
 In 2018, the regulator banned Price Waterhouse for two years from auditing any listed firm for its role in the Satyam Computer Services scam. However, the audit firm had successfully challenged the same in the Securities Appellate Tribunal and got the order quashed.
 In November, the Supreme Court stayed a SAT order which had held that Sebi does not have the power to bar auditors.
 "Our position is very simple -- if they're auditing listed companies based on which investors are investing, and if we find that that work has not been done properly and in investors' interest, some audit firms should not be allowed to audit for sometime of the listed companies," Tyagi said at an event here.
 "It is our parliamentary mandate I would say to see that it is done and there is no trouble there. It goes to the basic issue of investor protection being the parliamentary mandate of Sebi," he noted.
 According to Tyagi, audit firms are important gatekeepers who help companies put out results and financial performance to the stock exchanges, based on which investors take the call whether to invest or not.
 "It is not our case that Sebi is the agency which registers or regulates the auditors. It is nothing like that... We are not de-registering auditors. We don't have the authority and we don't wish to have that authority," he said.
 He also made it clear that Sebi's expectation is that faulty audits should not lead to inflated profits or dividends.
 Regarding IPO market, Tyagi said there has been an improvement in activities lately and that nearly a dozen issues of over Rs 15,000 crore are in the pipeline.
 The regulator has given its wishlist for the budget to the finance ministry, includes ways to increase the activities in the corporate bond market, he said. AA BEN RAM

Sebi action against auditors: Tyagi says no question of 'turf wars'

New Delhi, Mar 15 () Auditors need to be equipped with the latest available technological tools to execute high quality audits, right-leaning think-tank Centre for Economic Policy Research (CEPR) has said in a new report. "The business in present times is becoming larger and more complex. It is becoming difficult for the auditor to really access the complete data and study the systems to achieve the in-depth examination and subsequent analysis," CEPR said. "The limited tools to access and analyse the data and study the systems to bring out effective reports is becoming a big challenge and these limitations are across both the large and small enterprise," it added. According to the report, a rapid increase in the volume of data requires auditors to be equipped with the latest available technological tools to analyse a much higher volume of data in their audits than previously required. Vijay Gupta, a former central council member of the ICAI, said, "The globalised businesses of the clients that the audit firms serve, calls for the latest audit techniques and processes that needs to get deployed by such audit firms, the absence of which becomes a handicap in apt deliverance of their duties." He said there is a need for better IT infrastructure to create more robust audit framework. The audit industry has been facing multiple challenges in the current macro-economic environment and these are further getting aggravated by a prevailing negative narrative around the audit profession in the country. There has been a spate of actions taken against auditors in the recent times, including against PwC in the Satyam scam case, and against Deloitte and BSR with regard to the IL&amp;FS fraud. Also, in the 2013 case of NSEL, auditors were arrested by the Economic Offences Wing (EOW) Mumbai, but were realised on bail later. According to CEPR, latest advances in technology promise significant benefits for the audit profession, with a number of key drivers signalling the need for technological change in audit. Such drivers include the rapid increase in volume of data, changes in business models, shift towards automation and the demand for a proactive and forward-looking approach to audit. These developments require auditors to be technologically sound to enable them to execute high quality audits, the CEPR report said. "An effective IT infrastructure at the auditor's end has become a must now to carry out error free audits and build confidence from overall governance perspective," said Pavan Kumar Vijay, founder of Corporate Professional, a corporate and legal advisory firm. He said the volume of transactions and data in businesses has increased dramatically since 2016 and is expected to keep increasing in the future, which underlines that the use of advanced technologies and data analytics promises a transformation in the audit and build confidence. BJ ABM

Auditors must use latest tech tools for quality audits: CEPR

New Delhi, Dec 8 () With an aim to upgrade skills and build their bandwidth, an increasing number of domestic audit firms are looking for global tie-ups to take on multinational giants in the sector.
The aim is to become globally more competitive by deploying stronger processes already being followed by the global audit firms in delivering audit mandates.
"There has been a significant jump in the number of mid-sized Indian audit firms looking for global tie-ups in the recent past. More than a dozen such firms have approached various global players in past few weeks," said a consultant who is helping local firm scout for a foreign partner.
The primary reason being cited is the growing complexity in businesses, which auditors must understand to deliver a high-quality audit, compounded by the fear of stringent action by regulatory and investigating agencies for negligence or collusion by them in cases of corporate frauds and business failures.
In recent times, there has been a spate of actions against auditors, including against PwC in the Satyam case and against Deloitte and BSR in the IL&amp;FS matter.
The Supreme Court recently stayed an order by the Securities Appellate Tribunal, which held that Sebi lacked powers to bar auditors, after the capital markets regulator contested a SAT ruling that had quashed a two-year ban on PwC in connection with the Rs 7,800-crore Satyam scam.
In the IL&amp;FS case, the NCLT had launched proceedings against the company's erstwhile auditors but the Bombay High Court later granted a stay. Besides, some auditors were recently arrested by the Economic Offences Wing of the Mumbai Police in the NSEL matter, though they were released subsequently on bail.
Some auditors, including in the case of IL&amp;FS matter, have also come under the scanner of the Serious Fraud Investigation Office (SFIO), while National Financial Reporting Authority (NFRA) is looking into alleged accounting lapses at Infosys.
The regulatory and government officials have often pointed out that auditors are supposed to be the conscience-keepers of a company and it is their duty to ring the alarm bells even at the slightest hint of a financial wrongdoing.
Within the auditor community, there is a growing feeling that the globalised businesses of the clients they serve call for the latest audit techniques and processes and their absence can be seen as a major obstacle in delivering on the audit mandate.
A robust IT infrastructure is the another biggest gap area that the domestic audit firms are looking to address through global tie-ups.
"Lack of a strong technology infrastructure has been an area of concern for Indian audit firms in carrying out audit for their clients. An effective IT infrastructure at the auditor's end calls for a substantial investment and a global tie-up or getting associated with a multinational network can help significantly on that front," said an audit committee head at a Nifty-50 company.
At the same time, the prevailing macro-economic environment is creating multiple challenges for the industry, while a negative narrative that has got built around the audit profession is making the things worse, experts said.
Vijay Gupta, ex-central council member of the ICAI, said, "Global tie-ups provide local audit firms access to better processes and practices already undertaken by the global partner, thereby building a much-needed bandwidth to serve the clients".
He cited the resource constraints faced by local firms as crucial for pushing them towards global tie-ups, and said the aim is to have a better IT infrastructure to create a more robust audit framework.
"The liability mechanism for auditors is an area that needs to be duly addressed. Drastic actions are being taken against auditors even in the absence of being proven guilty," said an auditor working with a leading firm.
He said a complete ban on any audit firm has a much larger impact on the industry and on people working in it.
On the other hand, officials at regulatory and enforcement agencies have been saying that audit firms tend to put the blame on individuals after finding themselves in the dock for their alleged role in frauds.
Experts opine that availability of trustworthy financial information on performance of companies is important for proper functioning of a market economy, but the entire auditing system has got into a precarious situation as questions are being raised around integrity of auditors.
Serious concerns arise if auditors' independence is compromised or when trust reposed in them gets betrayed as independent audits are fundamental to taking informed and correct investment decisions.
Experts feel that it is important to facilitate a business-friendly environment for corporates as well as for professionals in India and therefore it is vital that Indian laws and regulations on professional services keep pace with the changing market dynamics. BJ
BAL

Audit firms eye global tie-ups to upgrade skills, build bandwidth

In a bid to transform state-run banks, the Indian Government is determined to hire outside talent and bureaucrats in <keyword id="6355548" type="ORGANIZATION" weightage="80" keywordseo="Public-Sector-Banks">public sector banks</keyword>. The Government is going to appoint Ravi Venkatesan, an independent director on the <keyword id="6354512" type="CITY" weightage="80" keywordseo="Infosys">Infosys</keyword> board, and former revenue secretary Sumit Bose as chairmen of two public-sector banks. 
 Also, TN Manoharan, who is on the board of <keyword id="43217" type="CITY" weightage="80" keywordseo="Tech-Mahindra">Tech Mahindra</keyword>, and former petroleum secretary GC Chaturvedi are going to head two other banks. 
 
However, names of the banks they will be soon heading could not be confirmed. 
 
"Approvals have been sought for the candidature of Ravi Venkatesan and Sumit Bose," a senior official with the department of personnel &amp; training told Economic Times. The official also confirmed the news about appointment of Manoharan and Chaturvedi to head other banks. 
 
The Government wants to hire chairmen of eight banks as it wants to reform the state-run banking system. 
 
"It should take at least a week for the announcement of chairmen of eight PSBs," another official, aware of the developments, told ET, adding, “the move shows the resolve of the government to give more autonomy to state-run banks and transform the way banking is done at these institutions.” 
 
The official said the shortlisted candidates were industry leaders, veteran bankers and reputed bureaucrats, which will further empower individual bank boards. 
 
Venkatesan was the chairman of Microsoft India between 2004 and 2011. He is also a fellow of the Center for Higher Ambition Leadership, Boston. 
 
The financial daily reported that the Government had appointed Manoharan on Satyam’s board after it took control of the scam-hit company. The company was later on acquired by Tech Mahindra and Manoharan is now a director on the board of Tech Mahindra. He served as the president of Institute of Chartered Accountants of India during 2006-07. 
 
Bose and Chaturvedi are seasoned bureaucrats, as the former was revenue and disinvestment secretary while the latter held the charge of additional secretary, financial services, before he went on to become petroleum secretary. 
 
(Image: Indiatimes)

Big public banks to now have tough
corporate bosses from Infosys and Tech Mahindra

<div class="KonaFilter image-container float_right"><div class="image">Win McNamee/Getty Images</div></div>Business has always been plagued by fraud: witness the South Sea Company in the 1710s (which enveloped the British economy in a giant bubble) or Charles Ponzi's Securities Exchange Company in 1920 (which gave the world the Ponzi scheme) or the Enron and WorldCom scandals in the early 2000s. 
Ambitious fraudsters are attracted to businesses for the same reason that Willie Sutton, a contemporary of Ponzi, reportedly said he robbed banks: "Because that's where the money is."
Some frauds are committed by people at the top such as Bernard Madoff or Allen Stanford. Others are committed by hired-hands lower down the organisation. But all frauds involve abusing people's trust and diverting corporate resources for personal ends. Fraud by wayward employees, be they high or low, can never be eliminated. Directors and executives can, however, treat it like any other unavoidable risk, and manage it professionally.
The risk is particularly acute at the moment. Companies are straining the bonds of loyalty. They are making ever more use of contractors and temporary workers. They are putting more pressure on employees to hit targets; they are also holding down the wages of the majority of workers while increasing the boss's pay. This is all happening at a time when economic activity is shifting to the emerging world (where corporate fraud is rife) and to the internet (where fraudsters are having a field day). Kroll, a security consultant, found that 70% of the companies that it studied were affected by fraud in 2013, up from 61% in the previous year.
At the same time the punishment is harsher than ever. Companies nowadays run the risk of being held liable for their employees' misbehaviour unless they can show they had done their best to prevent it. Directors who play even the smallest role in frauds can now go to prison. America's Foreign Corrupt Practices Act and its European imitators have made a serious crime of something once seen as normal business practice: bribing foreigners. Companies infected by fraud can incur all sorts of other costs. Their licences to trade may be withdrawn, they may be barred from bidding for government work and they may be subjected to online campaigns urging customers to boycott them.
What can companies do to uncover internal scams? A new book, "Corporate Fraud: the Human Factor", by Maryam Hussain, an investigator atEY, an accounting firm, provides a timely guide. One answer is to look for the telltale signs. Some of the biggest corporate tricksters were people whose flamboyant personalities often raised suspicions: think of Robert Maxwell, or Augustus Melmotte in Anthony Trollope's "The Way We Live Now", perhaps the best novel about corporate fraud. Boards have a duty to pluck up the courage to challenge such larger-than-life bosses.
However, most corporate fraudsters do not have swishing reptilian tails as a giveaway sign. In many instances they are not borderline psychopaths, just ordinary people gone wrong. Frequently, they start with small crimes and then engage in ever bigger misdemeanours to conceal their wrongdoing. Nick Leeson, who destroyed Barings Bank by losing £862m in bad bets on derivatives, said, "It all started when I tried to cover for a junior colleague who had lost £20,000." Ramalinga Raju, the chairman of Satyam, who admitted to inflating the computer-services company's revenues by $1 billion, said, "It was like riding a tiger, not knowing how to get off without being eaten."
A second answer is to put procedures in place to detect frauds. The Sarbanes-Oxley law passed in America after the Enron and WorldCom frauds requires the boards of public companies to commission independent audits of their internal financial controls. But rigorous procedures can easily lure companies into a false sense of security. The employees most affected by those rules may be precisely the ones most capable of finding ways around them, as was the case with Mr Leeson and Jérôme Kerviel, a renegade trader at Société Générale.
Many companies seek reassurance that all is well by installing cyber-security tools to monitor employees' e-mails and internal accounting systems for suspicious activity. But fraudsters are often quicker at harnessing technology to disguise what they are up to (for instance, using instant messaging on their smartphones as a back-channel to communicate with accomplices) than companies are at using it to spot them. Those running scams may also be skilled at tricking colleagues into giving them passwords--a technique Edward Snowden may have exploited to devastating effect.
<h3>Praising the bearers of bad news</h3>
The most powerful weapon against fraud is not an algorithm or a checklist but a whistleblower. The Association of Certified Fraud Examiners calculates that three times as many frauds are discovered by tip-offs than by any other method. It also notes that firms with fraud hotlines, which staff can call anonymously, suffer smaller losses from fraud, and cut by seven months the "exposure gap" between the start of an illicit scheme and its discovery. Governments are increasingly providing whistleblowers with legal protection and financial incentives: America's Securities and Exchange Commission has created a $450m fund to reward them.
Companies that dither, blather or launch half-hearted inquiries when presented with evidence of employee misconduct often end up regretting it. JPMorgan Chase lost billions in its "London Whale" rogue-trader scandal, initially dismissed by the bank's boss, Jamie Dimon, as a "tempest in a teapot". Besides doing more to encourage whistleblowers, businesses must take decisive action to close the exposure gap. A botched investigation can tip off a fraudster and make it easy for him to cover his tracks. A suspicion of deliberate foot-dragging can render an entire company vulnerable. The damage done by corporate fraud can last long after the culprits have been identified.

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