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Investment Opportunities
Jan
30
Indian pharma major Wockhardt to cut UK jobs
Filed Under Healthcare, India Business | Leave a Comment
Indian pharmaceutical major Wockhardt is cutting jobs in its British division due to a steep fall in orders from the Unites States.
Wockhardt UK, based on the Wrexham Industrial Estate, is shedding 18 night shift posts. The redundancies will reduce the workforce to 307.
Company managing director Sijiwan Singh said it was unfortunate, but a sign of the times. He said, “To a great extent our clients for pharmaceutical and biotechnology products are in the US. But because of the credit crunch financing is becoming incre asingly difficult. It is unfortunate, but with this whole meltdown, our clients and orders are diminishing day by day.”
Singh said the night shift affected by the job cuts was only started in addition to the two existing shifts after an upsurge last year. But the company, which manufactures medicine, vaccines, nutrition products, and pharmacy ingredients, would now scale back to two shifts. The Wrexham plant is part of the international group with its headquarters in India. The cuts are the latest to hit the region as manufacturing industries struggle in the current economic gloom.
Jan
7
Satyam reveals Fraud after Fiasco
Filed Under IT BPO KPO Services, India Business, Indian Companies, Indian Government, Indian Stock Market | 4 Comments
Today is a bad day for investors of the Indian capital markets.
Till now the belief was that Satyam’s Board did a fiasco (which is paradonable if the intent was genuine) by doing things without the right process.
But today, Satyam’s chairman has revealed fraud in financial statements over the last few years, which results in over Rs5000 cr of non-existing assests. Now its a crime, not a mistake.
Read this fax letter from: Satyam_Computer_Services_Ltd_070109.pdf
Exactly a week back, we had written of two basic issues in the Satyam fiasco. Lessons From Satyam Investor Issues
The second point was this:
2. The effectiveness of Satyam’s corporate governance
What has come out very clearly from today’s news is that corporate governance was really bad at Satyam — and this is was top 5 Indian IT services companies — so you can well imagine what kind of controls may or maynot be there in smaller companies.
So this is going to put all IT companies under a very tight spot — with unplanned extra expenses in all kinds of auditing reviews. Everyone has to learn from Infosys - the leading IT services stock — about how to be fully tranparent with investors. SEBI should use Infosys reporting as a guideline.
Investors are likely to now reduce the P/E valuaiton for mid-cap and small-cap companies, because this corporate governance risk just can’t be calculated for smaller companies when a large company like Satyam can do it wrong, despite an army of auditors and market analysts.
Every investor needs to reassess his portfolio companies and check if the parts are adding to the total. This weak global economy will expose more such examples where things were hidden under rosy valuations and positive market conditions.
Following were the comments of Narayana Murthy (NRN) of Infosys about an hour back:
I am shocked and painfully dismayed at what has happened at an important software company in India. It is a total failure of governance. I only hope that relevant authorities get to the bottom of this and take appropriate action.
It is important to remember that one Satyam does not make the entire Indian software industry. I believe it is an isolated case. I want foreign investors to realise that there are many honest managements and good companies in this country. While what has happened at Satyam is totally regrettable, I believe that it does not represent India. It just represents one individual and one company.
In the short term, investors will start looking deeper into all companies they want to invest in, and rightly so. Once they realise that things are not all that bad and that most companies are decent and managements honest, they will regain their faith.
This too will pass. Investors will consider this as an extreme case. Right now, all of us must conduct ourselves in the most legal and ethical manner. It is a good warning signal for all managements.
