Monday, January 12, 2009

Byrraju Ramalinga Raju, founder and chairman of Satyam Computer Services, and his brother, B. Rama Raju, the company’s managing director, were arrested late Friday by Andhra Pradesh police. The brothers were placed under judicial custody in a Hyderabad, India jail and will remain there until January 23. Facing charges of criminal breach of trust (Section 406 of IPC), criminal conspiracy (Section 120-B), cheating (Section 420), falsification of records and forgery (Section 468), and fraudulent cancellation of securities (Section 477-a), they face up to ten years imprisonment if convicted.

After 18 hours of interrogation by the Crime Investigation Department (CID) at the state police headquarters, the Raju brothers were sent to the Chanchalguda prison and slept Saturday night on the floor along with 26 other low-risk inmates.

S. Bharat Kumar, the Rajus’s lawyer, asked the magistrate to issue orders for health monitoring. “His blood pressure is fluctuating and he needs medical treatment,” said Bharat Kumar. Mr. Raju appeared before the court Saturday while a team of doctors visited him after he had complained of chest pain.

Raju has Hepatitis-C, and both brothers have high blood pressure, so health precautions are necessary while imprisoned. Prison rules mandate service of jail food thrice a day. The menu includes 650 gm of rice thrice a day with 250 gm of vegetable curry and 125 gm of ‘daal’ plus tea twice a day.

Satyam’s chief financial officer Vadlamani Srinivas, who was also arrested Saturday, had undergone preliminary investigation and appeared Sunday before a special court, according to A. Sivanarayana, Andhra Pradesh additional director general of police. Srinivas was remanded to judicial custody until January 23 by Mr. D. Ramakrishna, Sixth Chief Metropolitan Magistrate, and sent to the Chanchalguda jail with the Raju brothers after interrogation by CID’s Crime Branch (the CB-CID). During his Saturday night arrest and probe by CB-CID, Srinivas made revelations which are contained in his confession letter as submitted to Network 18. “According to me fixed deposits are unreal and fictitious which were managed and was an understanding between the audit section management,” Srinivas stated.

The Hyderabad court on Monday postponed the bail hearings of the Raju brothers and Srinivas to January 16. To be defended by a battalion of 25 lawyers, the three accused will remain in Chanchalguda Central Jail until further court order. The Raju brothers were shifted Sunday to a mid-size Old Hospital Barrack cell shared with a bootlegger.

In 2008, the company struggled to purchase two infrastructure companies founded by family members of company founder and CEO Dr. Raju – Maytas Infrastructure and Maytas Properties – for $1.6 billion, despite concerns raised by independent board directors. Dr. Raju tendered his resignation on January 7 after due notice of falsified accounts to board members and the SEBI.

Since January 7 when two lawsuits were commenced, dozens of other class action law suits were filed against Satyam for hundreds of millions of dollars damages based on fraud in the United States District Court for the Southern District of New York in Manhattan, among others. The securities fraud class-action lawsuits have been filed on behalf of investors who bought Satyam American Depositary Receipts (ADRs) since 2004.

On Wednesday Dr. Raju admitted to falsifying and overstating Satyam’s cash reserves by $1B US dollars (£661m) or 94% of its cash and bank balances on books at the end of September.

The fraud was perpetrated several years ago to bridge “a marginal gap” between actual and accounting books operating profits, and continued for several years. “It was like riding a tiger, not knowing how to get off without being eaten,” B. Raju said.

In a letter to the board, Dr. Raju said that neither he nor the managing director had benefited financially from the inflated revenues. Further claiming that none of the board members had any knowledge of the dire company situation, he noted that Satyam’s balance sheet as of the September 30, 2008, carried inflated figures for cash and bank balances of INR 5,040 crore (as against INR 5,361 crore reflected in the books). He alleged it also carried an accrued interest of INR 376 crore which was non-existent. He confessed that he himself prepared an understated liability of INR 1,230 crore on account of funds amid an overstated debtors’ position of INR 490 crore (as against INR 2,651 crore in the books).

Indian analysts have compared the Satyam-Raju scandal to the infamous American Enron scandal. Immediately following the media expose, PricewaterhouseCoopers, auditor of Satyam’s accounts, was set to be probed for complicity in the controversy. Times Now has reported that the Andhra Pradesh CID arrested PricewaterhouseCoopers (PWC) representative Gopal Krishnan for investigation on Saturday night.

New York-listed Satyam Computer Services Ltd., India’s fourth-biggest software firm, is a consulting and information technology services company based in Hyderabad, India. Founded in 1987 by Dr. Byrraju Ramalinga Raju, Satyam’s network spans 67 countries on six continents. It employs 53,000 professionals in India, the United States, the United Kingdom, the United Arab Emirates, Canada, Hungary, Singapore, Malaysia, China, Japan, Egypt and Australia. Its monthly salary outflow is estimated at six billion rupees ($125 million). Deriving more than half of its revenues from the United States, it serves 700 global companies, 185 of which are Fortune 500 corporations.

Satyam’s clients include Nestle, Ford, General Electric Co., General Motors Corp., Nissan Motor Co., Applied Materials Inc., Caterpillar Inc., Cisco Systems Inc. and Sony Corp., and brought in about $40bn last year.

In December 2008, a failed acquisition attempt involving the company Maytas led to a plunge in Satyam’s share price. After Wednesday’s confession, Satyam stocks fell further by more than 70%, while the BSE SENSEX dropped to 7.3% Wednesday, causing the removal of Satyam Computer Services from its indices on Thursday. The shares free fell to 11.50 rupees on Friday, their lowest level since March 1998, compared with around last year’s high of 544 rupees.

The New York Stock Exchange has terminated trading in Satyam stock as of January 7, while the National Stock Exchange of India said it will remove Satyam from its S&P CNX Nifty 50-share index from January 12.

India’s biggest-ever corporate fraud has seriously tainted India Inc.‘s strong corporate governance image. “The admission of fraud in financial affairs has created an adverse impression in the minds of trade, business and industry across the world,” the Indian government admitted. The government intervened on Friday night, dismissing Satyam’s board of directors, announcing it will appoint representatives to manage the affairs of the insolvent outsourcing giant. The board would meet within seven days. Dr Yeduguri Samuel Rajasekhara Reddy, chief Minister of State of Andhra Pradesh, India, on Sunday said that the main agenda is to protect the jobs of the software professionals. “We are taking all needful steps in coordination with the government of India to ensure that the jobs of 53,000 engineers are protected and the shareholders’ money is salvaged,” Reddy said.

“We are working on the names. The Satyam case is an aberration. The credibility of the Indian corporate sector in general, and IT sector in particular, should not be allowed to suffer because of this.” Prem Chand Gupta, the Corporate Affairs Minister said. The Federal Government of India appointed a three-member independent board with full authority for Satyam on Sunday and was set to convene within 24 hours. “We have appointed Deepak Parekh, chairman of Housing Development Finance Corporation, Kiran Karnik, former president of IT industry body NASSCOM and C. Achutan, former member of Securities and Exchange Board (SEBI) of India,” Mr. Gupta said.

In early Monday trading (0535 GMT) after the creation of the three-member board, Satyam shares rocketed upwards 60% to 38.15 rupees, even though the main Mumbai market was down more than 2%. BBC reported that Satyam shares have jumped 51% to 36.05 rupees on Monday after the stock lost 87% last week. “The constitution of the new board is seen as a positive step by the market. It’s a confidence boosting measure,” K.K. Mital, Globe Capital, New Delhi head of portfolio management services said. “But the rally will depend largely on the financial situation at the company and the kind of measures that are taken to improve liquidity,” he added.

The Company Law Board, however, has requested Satyam’s interim board not to implement its decisions. “We are asked by the Company Law Board not to implement the decisions of the board. But we are allowed to continue our activity. The team which was constituted recently is continuing its work,” Satyam head global marketing and communications, Mr. Hari Thalapalli, said.

Lazard Ltd., who has a 7.4% stake in Satyam, sought representation on the new board and wrote as much to The Indian Ministry of Corporate Affairs. “As the largest shareholder in the company, we want to be consulted in whatever decisions are being taken by the Indian government. We have written to the Ministry of Corporate Affairs and are awaiting a reply from them,” Hitesh Jain, a partner at ALMT Legal, who claimed to represent Lazard, said. “It is a fair proposal and we will take a decision as and when we clear other issues. No decision on this has been taken yet,” P.C. Gupta replied.

Meanwhile, the Securities and Exchange Board of India (SEBI) also announced it will try to control the damage and take steps to boost investor confidence. “This exercise will be undertaken after the third quarter results and is expected to be completed by end of February this year,” a SEBI official statement said. A SEBI team is also investigating acting-CEO Ram Mynampati whose salary was greater than that of founder Dr. Raju and all the directors combined. Dr. Raju had just one fifth of Mynampati’s total package of over Rs 3.5 crore as of March 2008. All the directors comparably received only a total of Rs 2.6 crore as salary, commissions, sitting fees, professional fees and other receivables.

Further, the Andhra Pradesh Police CID and teams assigned by the Economic Offences Wing of the CB-CID conducted searches Sunday of homes of the accused including the ex-CFO’s office to gather documentary evidence about the financial fraud.

Monday, July 25, 2005

Windsor Castle, one of Queen Elizabeth II of the United Kingdom’s official residences, is to get a hydro-electric power scheme.

The £1 million project will consist of a series of under-water turbines to be installed at Romney Weir in the nearby River Thames. The system will generate 200kW, enough to meet approximately one third of the castle’s electricity needs.

The electricity from the four turbines will not be sold into the local electricity grid, but will instead be directly connected to Windsor Castle’s electrical system. It will save 600 tonnes of carbon dioxide from being released into the atmosphere every year.

The scheme was announced after it gained planning permission from the local council, the plans having been submitted in February of last year. A feasability study will now be conducted, with construction scheduled to start next year.

The Windsor Castle is not the only environmentally-friendly Royal scheme. A borehole beneath Buckingham Palace provides cold water for air-conditioning and the Duke of Edinburgh’s taxi runs on liquid petroleum gas.

Tuesday, August 9, 2005

Explorers have just released information on the discovery and exploration of a new entrance to Kentucky’s Mammoth Cave. Located in the east central United States, the 579-kilometer-long (360 mile) cave is the longest known in the world. Despite its length and a 200 year exploration effort, only eight natural entrances have been located into the vast underground system.

The entrance was discovered in September 2003, and a route to known sections of Mammoth Cave was first discovered in March. The actual connection was made at 11:55 p.m. Central Standard Time, March 18, 2005 (4:55 UTC, March 19, 2005) by veteran cavers Alan Canon, John Feil, Dick Market, and James Wells. The latest mapping adds four kilometers (2.5 miles) to Mammoth Cave’s total length.

Alan Glennon, a cave scientist at the University of California, Santa Barbara, describes the find as “exciting”. “Such significant discoveries show that we’ve still got a lot to learn about places right under our feet”, he said.

Exploration of Mammoth Cave is conducted by the Cave Research Foundation and Central Kentucky Karst Coalition. Both groups’ membership is open to experienced cave surveyors. The explorers note that the new entrance is located far from the developed, tourist trails within Mammoth Cave National Park.

Mammoth Cave is located at 37.186° N 86.100° W.

Saturday, September 3, 2005

Grammy award-winning rapper/producer Kanye West appeared on a live on-air telethon simulcast on NBC, MSNBC, CNBC and PAX for Hurricane Katrina victims. Live on air, West said “George Bush doesn’t care about black people,” after saying “America is set up to help the poor, the black people, the less well-off as slow as possible.” He also said “the Red Cross is doing everything they can,” and stated that he was going to see what the maximum amount of money he can donate is. West criticized government authorities and stated that “They’ve given them permission to go down and shoot us.”

West first deviated from the script he and comedian Mike Myers were using by commenting on the recent uproar over differently captioned photos for black and white people in the aftermath of the hurricane: “I hate the way they portray us in the media. If you see a black family, it says they’re looting. See a white family, it says they’re looking for food.”

Though a several-second delay was in place, the comments were let through uncensored on the EST live broadcast as the person in charge “was instructed to listen for a curse word, and didn’t realize he had gone off-script,” according to an NBC spokeswoman.

NBC has released a statement after the broadcast: “Tonight’s telecast was a live television event wrought with emotion. Kanye West departed from the scripted comments that were prepared for him, and his opinions in no way represent the views of the networks. It would be most unfortunate if the efforts of the artists who participated tonight and the generosity of millions of Americans who are helping those in need are overshadowed by one person’s opinion.”

The sponsor of the event, the American Red Cross, also issued a statement on the telethon, stating: “During the telecast, a controversial comment was made by one of the celebrities. We would like the American public to know that our support is unwavering, regardless of political circumstances. We are a neutral and impartial organization, and support disaster victims across the country regardless of race, class, color or creed.”

Friday, December 8, 2006

When introducing the Iraq Study Group Report to a Senate Committee, former Secretary of State James Baker emphasized that all the 79 recommendations in the report complemented each other and had to be taken together. This was not a “fruit salad” from which one could pick and choose. Despite this, President Bush is giving indications that he is going to do just that. While agreeing that the Report had some good points to make, he said that he had also asked the Pentagon, the State Department and other government agencies to reflect on the Iraq situation and report their conclusions to him.

The report proposes progressive changes to the role of the troops deployed in Iraq, from combat to the training of Iraqi forces and the withdrawal of all combat troops by early 2008, depending on local conditions. The President made it clear that matters concerning the deployment of troops were for the military to determine. A change of strategy is expected to be announced within the next few weeks.

Bush has said that he will not talk with Syria or Iran unless they meet certain conditions. Syria would have to “stop destabilizing” the government of the Lebanon. Iran must “verifiably suspend their nuclear enrichment program.” In declaring these conditions, Bush and Tony Blair, prime movers in the invasion of Iraq, are in agreement.

Tony Blair reflected that the report’s recommendations that settling the Arab/Israeli disputes in the area should be given priority. He has said that the key to solving the problems in Iraq, Lebanon, and elsewhere lay in settling the two-state disputes in Palestine. He announced that he would be visiting the region shortly. He would bring his experience in Northern Ireland to bear on the problem, indicating that persistence was needed to achieve reconciliation. President Bush said he supported this initiative.

Meanwhile, Israel’s Prime Minister, Ehud Olmert, flatly rejected the notion that there was any connection between the problems in Palestine and the situation in Iraq. He stated that the time may not be right for Israel to be negotiating with Syria and he reiterated Israel’s absolute opposition to Iran’s development of nuclear weapons. Robert Gates, the new candidate US Secretary of Defense, asserted that Iran is surrounded by nuclear powers, including Israel. Shimon Peres, Israel’s deputy prime minister, refused to affirm or deny whether Israel had a nuclear weapons capability, saying that such uncertainty was a defense in itself.

Thursday, February 17, 2005

CARACAS, Venezuela –The Brazilian President Luiz Inácio Lula da Silva met the Venezuelan President Hugo Chavez on February 14, 2005 in Caracas, Venezuela. Brazil and Venezuela signed agreements of cooperation on many areas. According to the Brazilian government this was a strategical encounteur. This meeting is the first of three meetings that President Lula will have with South American Presidents in three days. The scheduled meetings are with the presidents of: Venezuela (February, 14), Guiana (February, 15) and Suriname (February, 16).

President Lula was accompanied by the following comitiva: the Minister of Development, Industry, and External Trade Luiz Fernando Furlan, the Minister of Finance Antônio Palocci, the Minister of Foreign Relations Celso Amorim, the Minister of Health Humberto Costa, the Minister of Mines and Energy Dilma Roussef, the Minister of Tourism Walfrido Mares Guia, the President of Petrobras José Eduardo Dutra, the President of National Economic and Social Development Bank (BNDES) Guido Mantega, the President of Eletrobrás Silas Rondeau Cavalcante Silva and the Special Secretary for Aquaculture and Fisheries José Fritsch. In addition a delegation of executives representing enterprises from Brazil accompanied the President.

The Brazilian Ministry of External Relations told the trip aims the construction of a strategical alliance and commercial integration between both countries. The Brazilian Presidential Advisor Marco Aurélio Garcia said:”With this gesture, Brazil will consolidate one of its major political goals, which is the constitution of a South American community of nations”. He added: “These agreements with Venezuela are strategical. We want this agreement as a model for other agreements in the region.”

According to President Lula the integration of the Latin America is the priority number one of his government. Days before the arrival in Venezuela and commenting about the trip Lula said: “We’re going to do the same thing in Colombia and in other countries in which integration is no longer a campaign speech but part of the way we deal with real things, day to day”.

The integration of the Latin America is the politics repeatedly proposed by Lula during the meetings of the Foro de São Paulo. According to him and the others members of the Foro there must be a integration among all the left parties and governments of Latin America. The union aims to be an alternative and opposing force to the politics and influence of the richest countries, mainly the United States. Among the organizations which are usually participants of the Foro de São Paulo are: Communist Party of Cuba, Colombian Communist Party, Communist Party of Bolivia, Communist Party of Brazil, Workers’ Party, Paraguayan Communist Party, Peruvian Communist Party, Socialist Party of Peru, National Liberation Army, Revolutionary Armed Forces of Colombia, Farabundo Martí National Liberation Front, Guatemalan National Revolutionary Unity, Tupamaros.

On December 4, 2001 during the 10th edition of the Foro de São Paulo in Havana Lula said:”A shoal of small fish may mean the finishing of the hungry in our countries, in out continent. We should not think as the History ended on our journey by the Earth. Even it happens just once, or with one gesture, let’s effectively contribute to the improve the life of millions of human beings who live socially excluded by this neoliberal model.”[1]

In Venezuela, once again, he brought out the integration wish: “This is the biggest dream I am carrying, that we can negotiate collectively, not like one country, but like a set of countries so we can do that our people may have the chance to conquer the full citizenship.”

Thursday, July 3, 2014

Ian Narev, the CEO of the Commonwealth Bank of Australia, this morning “unreservedly” apologised to clients who lost money in a scandal involving the bank’s financial planning services arm.

Last week, a Senate enquiry found financial advisers from the Commonwealth Bank had made high-risk investments of clients’ money without the clients’ permission, resulting in hundreds of millions of dollars lost. The Senate enquiry called for a Royal Commission into the bank, and the Australian Securities and Investments Commission (ASIC).

Mr Narev stated the bank’s performance in providing financial advice was “unacceptable”, and the bank was launching a scheme to compensate clients who lost money due to the planners’ actions.

In a statement Mr Narev said, “Poor advice provided by some of our advisers between 2003 and 2012 caused financial loss and distress and I am truly sorry for that. […] There have been changes in management, structure and culture. We have also invested in new systems, implemented new processes, enhanced adviser supervision and improved training.”

An investigation by Fairfax Media instigated the Senate inquiry into the Commonwealth Bank’s financial planning division and ASIC.

Whistleblower Jeff Morris, who reported the misconduct of the bank to ASIC six years ago, said in an article for The Sydney Morning Herald that neither the bank nor ASIC should be in control of the compensation program.

Thursday, December 4, 2008

A study by the United States Department of Veterans Affairs presented to a Congressional panel on November 17, has confirmed that Gulf War Syndrome is a legitimate illness contracted by soldiers who took pyridostigmine bromide pills in order to counter the effects of nerve gas during the First Gulf War in Iraq. Several other factors likely contributed to Gulf War Syndrome, including excessive exposure to pesticides, mainly Permethrin and DEET, and chemical weapons residue caused by the American demolition of the Iraqi munitions depot in Khamisiyah.

The report estimates that about 1 out of every 4 veterans of the Gulf War are affected by this illness; this could mean anywhere between 175,000 and 210,000 soldiers are affected by the syndrome. The report also concluded that veterans exposed to the toxins spread by the destruction of the munitions depot have died of brain cancer at double the rate of other Gulf War veterans. Other problems associated with the condition are: fatigue, headaches, joint pain, rashes, breathing difficulty, forgetfulness, circulation problems, and cardiac troubles.

Gulf War Syndrome has been the focal point of veterans rights groups since the illness first became noticed in the early 1990s. The United States and British governments claimed that the illness was merely psychological trauma from war misinterpreted as an illness, and veterans could not receive medical coverage for the illness.

“I feel vindicated, but I’m angry. This is so long overdue,” said Denise Nichols, an advocate for veterans’ rights and a nurse who served during Operation Desert Storm. The National Gulf Veterans and Families Association (NGVFA) said that many veterans committed suicide after learning that the government did not recognize their illness as real.

Tuesday, December 12, 2006

Two male models (known as Tyler Denk, 29, and James Branaman) have won the tenth season of CBS’ hit show The Amazing Race. The models were awarded USD$1 million. Each received USD$500,000. Both are recovering addicts and are friends in the modeling scene, they reconnected after going through rehab.

The models competed in a race around the world against people from around the United States. After arriving at France’s Caen Airport, one member of each team was required to skydive. After the task was finished, teams had to design clothes at a shop in Paris.

When they were finished, teams had to get a flight to New York City, Rob and Kimberly told the manager that they had to win $1 million, he gave them a seat. Tyler and James also got on the same flight.

When the teams arrived in New York their first stop was at the Daily News building. The last stop was at Manhattan’s Astor Park were they got their final clue. Tyler and James quickly got into a taxi cab and arrived at St. Basil Academy in Garrison, New York, they ran to the finish line were the host Phil Keoghan with all eliminated twelve teams waited for the winner. Rob Diaz and Kimberly Chabolla were in second and Lynn Turk and Karlyn Harris were in last.

“For James and I, we’ve been through so much together as a friendship and in our lives that, first, to accomplish yet another thing — that’s gravy on top of the mashed potatoes,” said Tyler Denk. “Another gift of life.”

“We live our lives with such gratitude already that this was just one of those experiences that we would only get through sobriety,” James Branaman said.

The Amazing Race season 11 is expected to start next year.

Saturday, December 3, 2005

Mayor Scott Jewell of the city of Dyer, Tennessee did not issue a “stop work order” to Dyer Grain Company late Tuesday afternoon as had been expected. The order would have temporarily halted construction of new grain storage tanks.

Dyer Grain’s efforts at expansion have been blocked several times over the past few years both by zoning restrictions on the height of structures and by citizens groups who filed suit against the grain company and the city’s board of zoning appeals. The lawsuit was dismissed two months ago. The Dyer City Council then amended the zoning ordinance to include “grain storage tanks and bins” in a section of the ordinance listing exclusions, such as free standing spires and towers, to the regular 40 foot height restriction on buildings.

Several citizens spoke at the November 28 city council meeting to address alleged deficiencies in the building permit issued to Dyer Grain. The citizens claimed that according to the site plan filed with the application for the permit, the location of the tanks will violate another provision in the zoning ordinance restricting the height of all structures to the distance from surrounding property lines plus ten feet. The citizens were also concerned over a “grain conveyor” that will cross a city street. Mayor Jewell indicated that he would contact the Gibson County building inspector (who is contracted by the city to act as the municipal inspector) to research the citizens’ concerns.

Jewell contacted Ricky Bailey, Gibson County Building inspector, on Wednesday. Bailey reportedly could find no deficiencies with the permit and, based on this advice, Jewell chose not to issue the stop work order himself. The City Council could still meet and vote to issue the order. The council meets the second Monday of each month.

“The main problem is that the grain company is in an industrial zone — which is located smack in the middle of a low-density residential zone.” Nathan Reed, an elected Alderman of Dyer said, “The property values in the area have increased (with inflation) but not at the same rate as other properties.”

Normal buildings, such as offices and warehouses, can’t exceed 40′ plus 10′ to the eave. The requested change in the ordinance changes the status of the towers from a building to the same status of an antenna or tower.

Mr Reed added, “The height to the eave is 76′, the height to the top of the tank is 105′, the height to the top of the elevator (atop the tank) is 133′. The 133′ is the only measurement that matters now because the change to the zoning ordinance means this is no longer a “building”, but rather the same as an antenna or tower.”

“The grain company specifically requested that change to the ordinace — which was opposed by several citizens…They can build it as high as they like so long as it conforms to the overal height restriction for towers, spires, etc.”

Mr Reed commented on additional concerns, “The citizens are concerned about the health effects of (additional) grain dust, noise, and grain explosions.”

The new construction is expected to generate annual property tax revenues of $10,000 to $16,000.