Satyam saga...

Firstly, what is NOT surprising about the Satyam saga is that an Indian company has acknowledged that it has cooked its books. What IS surprising is that it was an IT company (listed on NYSE and subject to SEC regulations et al) which sprang the confession.

What IS also surprising is the shock that has been expressed by investors and regulators et al. It is common knowledge that a whole bunch of companies employ aggressive accounting at the minimum and do outright fudging in some cases.

What IS surprising is the swiftness with which the central government has acted (leaving aside the laxity in the first couple of days; but that largely reflects not knowing what to do as they have never faced such a situation before.), replacing its board with a new board which carries significant credibility - Kudos to the govt for their actions so far.

The SEBI proposal to have a peer audit of all large companies (Sensex, Nifty) is welcome but that audit needs to be truly independent and it must be paid for by the SEBI or the exchanges. In fact this is a good time to revist the practice of annual audit being paid for by the company (the management effectively). Its also a good time to increase disclosures...

Overall this will obviously create a negative impact about India globally amongst investor community but the speed with which the situation is resolved and guilty punished and steps taken to reassure that other large companies' books are not cooked is crucial in determining how long lasting the impact would be...