Satyam Saga - A new twist
Insider Trading. Yes. This seems a real possibility. Given the magnitude of the fraud and the long time it has been going on - nearly 7 years - the only incentive for the top honchos to keep the show oops - keep the fraud going is the high market cap of Satyam shares. When a total collapse is imminent and you are in the know if it, what do you do - loot and run. This is exactly what Raju & Co did. Eighty lakh shares were sold. That is 80,00,000.
There are also media reports that the C-Execs tipped off FI & FIIs about the developments is a bit far fetched. But possible. The reason being Quid Pro Que. I help you reduce your losses & in return you bail me out. With market cap crashing every day with more bad news and redemption pressures on MFs and other institutional investors and low, lower, lowest NPVsthis tip off saved more than Rs 1000 crores in a single day. The math is very simple.
But is the offense nail able ? On Satyam top brass - yes. On outside investors - very difficult.
The law is very simple. If you are an employee in the know and if you had sold shares and in the next few days there is news or a press release which leads to a drop in share price then it is by definition Insider Trading.
But the FI tip off story is slightly different since they are not insiders and the tip off is difficult to prove except when it leaves a trail like email or sms. ( the ICICI Bank customer raid on the bank after the banking collapse was based on rumours spread on sms and same was traced down to a sub broker in Erode of a leading broking firm. This was done in 48 hours and legal action initiated )
But in the Satyam Saga the FIs pre knowledge is difficult to establish and given the earlier faux faus of Satyam in the Maytas fiasco & the general weakening of the markets can be cited as reason enough for bulk share sales and get away scot free. But Satyam bosses cannot.
Fraud of mega scale, forgery, use of forged documents and now insider trading. Any other offense left out ? God Bless Corporate Greed.
PS : How much more murkier can it get ? The story continues.......
The next edition : The mind of the fraudster. How it all happens.
There are also media reports that the C-Execs tipped off FI & FIIs about the developments is a bit far fetched. But possible. The reason being Quid Pro Que. I help you reduce your losses & in return you bail me out. With market cap crashing every day with more bad news and redemption pressures on MFs and other institutional investors and low, lower, lowest NPVsthis tip off saved more than Rs 1000 crores in a single day. The math is very simple.
But is the offense nail able ? On Satyam top brass - yes. On outside investors - very difficult.
The law is very simple. If you are an employee in the know and if you had sold shares and in the next few days there is news or a press release which leads to a drop in share price then it is by definition Insider Trading.
But the FI tip off story is slightly different since they are not insiders and the tip off is difficult to prove except when it leaves a trail like email or sms. ( the ICICI Bank customer raid on the bank after the banking collapse was based on rumours spread on sms and same was traced down to a sub broker in Erode of a leading broking firm. This was done in 48 hours and legal action initiated )
But in the Satyam Saga the FIs pre knowledge is difficult to establish and given the earlier faux faus of Satyam in the Maytas fiasco & the general weakening of the markets can be cited as reason enough for bulk share sales and get away scot free. But Satyam bosses cannot.
Fraud of mega scale, forgery, use of forged documents and now insider trading. Any other offense left out ? God Bless Corporate Greed.
PS : How much more murkier can it get ? The story continues.......
The next edition : The mind of the fraudster. How it all happens.
posted by YesYes at
6:47 AM
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