The latest hot U.S. export? Massive corporate fraud:
India vowed to strengthen laws to prevent corporate fraud after Satyam Computer, the country’s fourth-largest software company, shocked investors by revealing profits had been falsely inflated for years.
Chairman Ramalinga Raju resigned on Wednesday after revealing India’s biggest corporate scandal in memory, sending the company’s shares plunging nearly 80 percent. [...]
About $1 billion, or 94 percent of the cash, on the company’s books was fictitious, Raju said, and manipulation of the cash flow may be a reason why the fraud was undetected.
“Companies have manipulated P&L (profit and loss) accounts before, but cash flow is the Holy Grail — you don’t tamper with it,” said Saurabh Mukherjea, an analyst at UK-based research firm Noble Group. (emphasis mine)
Clearly someone didn’t get that memo, Saurabh…
