Satyam Computers may be removed from the Sensex and Nifty following the revelation of manipulation in the company’s accounts, analysts said. Rajiv Mehta, senior analyst with India Infoline, a large brokerage house said his firm has immediately stopped covering Satyam and many other brokerage houses are also expected to do the same. There will not be any investor interest in the company anyway. The company may be removed from Sensex and nifty, he said.
With the fall in its stock prices, Satyam has lost its weightage in the Sensex considerably over the recent past and currently has weightage of only 1.56 as of Tuesday. While in nifty, the weightage is only 0.63 per cent.
As usual, we Indians have gone into hyperventilation mode over the fraud comitted by Satyam. Looking at the long term valuation of this company & being the favourite among investors, it seems that there was never an element of doubt about the company. This instance of Satyam has shattered our faith in the public limited companies. It again proves that minority shareholders in India are taken for granted by promoters and directors.
A second thing is, for people who say every Indian company will be distrusted now, it’s simply defeatist thinking. The US has seen far far bigger frauds, and in some cases like the Madoff scandal, the cream of their experts and even banks have been shown to have been criminally negligent. Does that mean we declare the whole financial class criminal there? I don’t think so. The important thing is to introspect on what we could have done earlier, and move swiftly to punish the Satyam management that was responsible, as also ensure the future of the firm’s employees is not endangered.
What should SEBI/ Govt. deal with this Satyam Computer’s Financial Bankrupt?