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@eqpulse Volatile Nifty extends gain; banks, oil gas, FMCG gain: The BSE Sensex and NSE Nifty continued to trade higher…
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CNBC DuPont Beats EPS Estimates, Revs. Light $DD QUOTE: #earningscentral Tue 07/24 11:26 AM
moneycontrolcom #Latest: Injured Messi out of Barcelona’s friendly against Hamburg Tue 07/24 11:24 AM
moneycontrolcom #Markets: Volatile Nifty extends gain; banks, oil gas, FMCG gain Tue 07/24 11:24 AM
moneycontrolcom #BusinessNews: Diesel price hike? Not before vice-prez polls, say sources Tue 07/24 11:24 AM
eFinancialNews In Pictures: Rothschild’s New Court headquarters, shortlisted for the prestigious 2012 Stirling Prize Tue 07/24 11:23 AM
FinancialTimes Madrid in duel with regions for aid Tue 07/24 11:23 AM
FT Madrid in duel with regions for aid Tue 07/24 11:23 AM
ReutersIndia #UK to charge Coulson, #Brooks over phone hacking Tue 07/24 11:19 AM
USATODAYmoney Goodyear soybean tires cut oil use Tue 07/24 11:14 AM
FinancialTimes German private sector woes mount Tue 07/24 11:12 AM
WSJ Libor probe expands to bank traders – groups from at least nine institutions allegedly banded together to rig rates. Tue 07/24 11:12 AM
FT German private sector woes mount Tue 07/24 11:12 AM
MarketWatch DuPont beats quarterly profit estimates, sees full-year profit toward lower end of outlook Tue 07/24 11:12 AM
Reuters_Biz New Bank of Japan board members doubt CPI to rise quickly Tue 07/24 11:10 AM
USEquityMarkets JC Penney Is Not a Good Deal Tue 07/24 11:10 AM
IIFLCommodities Walk confidently in the direction of your dreams. Share it with us and we could help you jumpstart it for you. #Contest Tue 07/24 11:07 AM
IndiaStock eClerx Q1 net profit up 62% at Rs 49.3 cr, stock up 12%… Tue 07/24 11:07 AM
ETIndustryNews Wipro gives 8% salary increase to offshore employees and 3% to onsite employees Tue 07/24 11:06 AM
EconomicTimes Wipro gives 8% salary increase to offshore employees and 3% to onsite employees Tue 07/24 11:06 AM
WSJ Breaking: Rebekah Brooks and Andy Coulson among eight people to be charged in U.K. phone hacking probe. Tue 07/24 11:06 AM

Truth, Integrity Should Be the Hallmarks of Financial Planners

Truth and integrity are words we hear a lot, but hardly find in real life. Politicians talk a lot about it and almost have nothing to show for it. Their oath of allegiance when they assume office is hollow, as politics today is a game of private enrichment at public cost. 

It is surprising that people have this conviction that integrity and truthfulness do not have a place in the present-day world. In fact, integrity does have a place in today’s world and those who are practising it know it and are doing extremely well. There are many who practise the highest levels of integrity in their personal lives and in their corporate avatars.
Infosys, Wipro, Tatas, Godrej, and the TVS group are some of the wellknown companies/groups, which come to mind when we are on the subject of integrity. For some of them, it is their calling card. For Tatas, apart from their management acumen, they are sought after by any company looking for an India entry, due to their impeccable credentials.
Integrity can be an actual differentiator. In the finance field, which deals with people’s money, it is even more important. The field has received a severe battering in the past three years and the integrity of this industry is in tatters. To this day, we read stories of deceit and wanton misleading of various participants.
Integrity is at the heart of building longstanding relationships. Integrity is difficult to maintain at all points. It is easier to bend the rules a bit, to suit one’s convenience. But that would bring down the moral stature a person has and their allweather dependability. Trust is built over time. One wrong move and their integrity is compromised.
Trust is a word that is often used by many in business. It is used even more in the world of finance — to allow another person to handle your money and with it your future requires quite a leap of faith. Hence, trust and integrity have even more relevance in the financial space.
Come to think of it, this can be one’s calling card. It will be an effective one at that. Each one of us operating anyway require something to distinguish us from the rest. Why not integrity? Why not actually take the moral high ground and stay there, where the clients like us to be?
Think of this as a long-term strategy. An insurance agent might lose some potential income by foregoing on the opportunity to push a product with juicy commissions — especially to a client who anyway does not know much about insurance. That is where integrity comes in. Integrity is what you do when no one is looking. What does the agent gain by doing the right thing? On an immediate basis, nothing. But the agent can always communicate to the clients all the options available to them and educate the client why, from among the various options, he is suggesting a particular product. This willingness to spend time to engage and do the right thing will certainly be appreciated and remembered. These are the agents who will go on to become the star agents of the branch, region, company, because a happy client recommending the agent to 10 others.
It works. Not just in insurance. It will work everywhere. It is even more fundamental in the financial planning profession, where I come from. Integrity is the backbone of this profession. Financial planners get to handle complete client information, unlike any other who may only get to see bits and pieces. Hence, integrity needs to be of the highest order here — not just beyond reproach. Trust is the currency here. And trust needs to be earned.
Earning trust is a relentless, dogmatic pursuit. Talking the truth all the time is immensely tough. But it needs to be done, because that is the highroad that one needs to take if success of the highest order needs to be achieved.
Quite simply, it is in our own self interest – enlightened self-interest. Doctors take the Hippocratic Oath to always act in their patients’ interest. A similar oath is what we all require. Both professions have a fiduciary responsibility. Done right, finance is as much a noble profession as medicine is – for one treats the body and the other takes care of the other most important part – money.
We all need to think about it. Each of us has to attest to the highest standards of honesty, integrity and truthfulness. This is not some utopia that I’m talking about. It’s what regulators are trying to create. It is what we can create ourselves and reap the benefits, too. And be counted as some of the best professionals there are. The choice is ours.

Satyam Chief Admits Huge Accounting Fraud.

NEW DELHI — Satyam Computer Services, a leading Indian outsourcing company that serves more than a third of the Fortune 500 companies, significantly inflated its earnings and assets for years, the chairman and co-founder said Wednesday, roiling Indian stock markets and throwing the industry into turmoil.

The chairman, Ramalinga Raju, resigned after revealing that he had systematically falsified accounts as the company expanded from a handful of employees into a back office giant with a work force of 53,000 and operations in 66 countries.

Mr. Raju said Wednesday that 50.4 billion rupees, or $1.04 billion, of the 53.6 billion rupees in cash and bank loans the company listed in assets for its second quarter, which ended in September, were nonexistent.

Revenues for the quarter were 20 percent lower than the 27 billion rupees reported, and the company’s operating margin was a fraction of what it declared, he said Wednesday in a letter to directors that was distributed by the Bombay Stock Exchange.

Satyam serves as the back office for some of the largest banks, manufacturers, health care and media companies in the world, handling everything from computer systems to customer service. Clients have included General Electric, General Motors, Nestlé and the United States government. In some cases, Satyam is even responsible for clients’ finances and accounting.

The revelations could cause a major shake-up in India’s enormous outsourcing industry, analysts said, and may force many large companies to investigate and perhaps revamp their back offices.

“This development is going to have a major impact on Satyam’s business with its clients,” said analysts with Religare Hichens Harrison on Wednesday. In the short term “we will see lot of Satyam’s clients migrating to competition like Infosys, TCS and Wipro,” they said. Satyam is the fourth-largest outsourcing firm after the three named.

In the four-and-a-half page letter distributed by the Bombay stock exchange, Mr. Raju described a small discrepancy that grew beyond his control. “What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It has attained unmanageable proportions as the size of company operations grew,” he wrote. “It was like riding a tiger, not knowing how to get off without being eaten.”

Mr. Raju said he had attempted and failed to bridge the gap, including an attempt in December to buy two construction firms in which the company’s founders held stakes. Speaking of a “deep regret” and a “tremendous burden,” Mr. Raju said that neither he nor co-founder and managing director B. Rama Raju had “taken one rupee/dollar from the company.” He said the board had no knowledge of the situation, nor did his or the managing director’s families.

The size and scope of the fraud raises questions about regulatory oversight in India and beyond. In addition to India, Satyam has been listed on the New York Stock Exchange since 2001, and on Euronext since January of 2008. The company has been audited by PricewaterhouseCoopers since its listing on the New York Stock exchange.

Satyam has been under close scrutiny in recent months, after an October report that the company had been banned from World Bank contracts for installing spy software on some World Bank computers. Satyam denied the accusation but in December, the World Bank confirmed without elaboration on the cause that Satyam had been banned. Also in December, Satyam’s investors revolted after the company proposed buying two firms with ties to Mr. Raju’s sons.

On Dec. 30, analysts with Forrester Research warned that corporations that rely on Satyam might ultimately need to stop doing business with the company. “Firms should take the initial steps of reviewing the exit clauses in their current Satyam contracts,” in case management or direction of the company changed, Forrester said.

The scandal raised questions over accounting standards in India as a whole, as observers asked whether similar problems might lie buried elsewhere. The risk premium for Indian companies will rise in investors’ eyes, said Nilesh Jasani, India strategist at Credit Suisse.

R.K. Gupta, managing director at Taurus Asset Management in New Delhi, told Reuters: “If a company’s chairman himself says they built fictitious assets, who do you believe here?” The fraud has “put a question mark on the entire corporate governance system in India,” he said.

News of the scandal — quickly compared to the collapse of Enron — sent jitters through the Indian stock market, and the benchmark Sensex index fell more than 5 percent. Shares in Satyam fell more than 70 percent.

Just a few months ago, Mr. Raju was trying to persuade investors that the company was sound. In October, he surprised analysts with better than expected results, saying he was “pleased” that the company had “achieved this in a challenging global macroeconomic environment, and amidst the volatile currency scenario that became reality.”

But by late December, it seems he had little support from the board or investors and four of the company’s directors resigned in recent weeks. Satyam recently retained Merrill Lynch for strategic advice, a move that is generally a precursor to a sale.

Mr. Raju said in his statement that he “sincerely apologized” to shareholders and employees and asked them to stand by the company. “I am now prepared to subject myself to the laws of the land and face consequences thereof,” he said.

Heather Timmons reported from New Delhi, and Bettina Wassener from Hong Kong.