Chamber advises against bailing out Satyam

January 8th, 2009 - 8:53 pm ICT by IANS  

Chandigarh, Jan 8 (IANS) The PHD Chamber of Commerce and Industry, a leading business and industry lobby in north India, Thursday asked the central government not to offer any bailout package for IT bellwether Satyam Computer, which has admitted to an accounting fraud amounting to about Rs.70 billion (Rs.7,000 crore).”There should be no bailing out of individual frauds like this. The Satyam episode has shown that there is some lapse somewhere. The responsibility in this case is on the auditors who, in this case, are a world reputed company,” the chamber’s national president Satish Bagrodia told reporters here.

He, however, added that the Satyam’s was an “individual” case that “could happen anywhere”.

Referring to the second stimulus package for the Indian economy announced by the government recently, Bagrodia said it was “well short of expectations”.

“The Rs.30,000-crore (Rs.300-billion) package is not enough. At least Rs.200,000 crore (Rs.2,000 billion) is required to help the market,” he said.

The chamber said raising the limit of external commercial borrowings (ECBs) was of little use as funds are not easily available in the international markets following the global meltdown.

“The government should ensure that banks step in to provide funds through corporate loans. We have not been able to locate where the funds of various economic packages have gone,” Bagrodia said.

According to him, “the unprecedented economic meltdown now requires unprecedented solutions,” especially from the government.

“Despite investor sentiment taking a beating and confidence being low, we should be able to make a turnaround in growth by achieving 8-9 percent in 2010-11. In 2009-10, it will be 6-7 percent,” Bagrodia said.

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