| Letters
to the Editor |
|
|||||
|
Enron syndrome
among Lankan auditors Investment
bankers and stockbrokers have been blamed for stock market booms
and busts from time immemorial, and with each bursting of a stock
market bubble, new laws have been introduced to control their operations.
But the Enron episode was unique because it also dealt a serious
blow to the auditing profession. Auditors are
expected to steer clear of vested interests and be impartial guardians
of shareholder interests. Even though
the admission of guilt by the auditor and subsequent criminal prosecution
received wide publicity and created a bad reputation to the profession,
it is actually nothing new. The rot started
when auditors wanted to upgrade the advice they routinely gave their
clients into an industry or profession. Whenever the
advice given by the subsidiary went wrong, the auditors, instead
of pointing it out, did their best to cover up or give excuses.
During the last decade or so, leading audit firms have faced severe
questioning and stiff penalties for acts of this nature. The number
of leading international accountancy firms has come down to fewer
than five from more than 20 in the '90s. This is mainly because
of amalgamations and mergers brought about by the inability on the
part of the auditors to pay the heavy fines imposed for their lapses
and misdemeanours. Strangely,
our 'reputed' auditors certify accounts of public-quoted companies
involved in well-publicized acts of misconduct without any comments.
These include violations of banking laws, share purchasing in employees'
names to circumvent laws, reporting unaccrued profits to raise share
prices, ignoring unfunded pension liabilities, under-providing for
loan defaults, private provident funds being used for illegal investments
and accounting irregularities. It appears
that auditors here have not yet learnt a lesson from their own parent
companies' mistakes. It is also strange that the Securities and
Exchange Commission and the Institute of Chartered Accountants and
other bodies are not taking action to impose fines on errant auditors. It is now left
to the aggrieved shareholders to resort to legal action against
auditors. One
nation, one country: the Nigerian experience The ethnic
composition of Nigeria is similar to that of Sri Lanka. The majority
ethnic group occupies an area less developed and poor in natural
resources. Their educational level is also comparatively lower.
In contrast, a minority ethnic group occupies an area rich in natural
resources and economically more developed. They are generally better
educated. Hence, the better privileges they enjoyed during the British
rule. After independence,
political power shifted to the majority ethnic group. The resultant
changes displeased the minorities. Due to these changes, one oil
rich southern minority state wanted to break away from Nigeria and
establish an independent country. This led to the well-known Biafra
civil war. More than two million people died in the conflict. A
majority of them died of starvation in contrast to the Sri Lankan
situation. Through strong
international pressure, parties to the conflict reached a peaceful
settlement that has survived for the past 35 years. Two main features
of this settlement are salient. The country consisting of 19 states
with different ethnic and religious groups is being treated as 'one
nation' and 'one country'. Any political party based on religion
or ethnic group is barred from contesting national elections, though
it is free to contest local and state elections. Nigeria is
not the ideal democracy to be taken as a model. It has been under
military rule many times since independence and experienced minor
conflicts, but there is much to be learned from the Nigerian experience. Peace
process mired in confusion Such negative
propaganda, if not neutralised, is bound to erode public confidence
in the government and the peace process. The peace-loving
people have demonstrated patience, putting up with hardships in
anticipation of a durable peace that would bring relief. The conflicting
pictures painted by the free media about the progress regarding
the ceasefire agreement have thrown the people into utter confusion.
Vacillation on the part of the government in announcing a date for
the Thai talks has added to public bewilderment. The Prime Minister
and the government should realise that the signing of a ceasefire
agreement and starting peace negotiations are not private arrangements.
The peace initiative
was made possible by overwhelming mandates given by the people at
two consecutive elections. Therefore,
the government should realise it has a sacred and solemn responsibility
to take the people into its confidence, and make an official statement,
disclosing the factual position. Accidents
on billboards As memories
are shortlived, picture boards will serve as constant reminders
to both pedestrians and motorists. Companies,
especially those in the insurance field, could sponsor them. It is hoped
that this suggestion will receive the attention of the authorities
concerned. Killed
in the rat race Kotmale
hydropower project will boost tea prices Except for
a few environmentalists, who will oppose anything, the whole country
is looking forward to the implementation of this project with the
hope that the tariff on electricity will be brought down with more
hydropower generation. Minister Arumugam
Tho-ndaman's concern about estate people who he believes will be
evicted without proper compensation is understandable. However, I
cannot understand the concern expressed by the so-called environmentalists. The environmentalists
appear to be giving little consideration for the positive side of
the proposal and concentrating more on the negative aspects. With the augmentation
of this project, there would be a great benefit to the estates in
and around Talawakele, Lindula and Agrapatane, where factories are
expected to produce high quality teas with cool winds blowing across
the plantations. The cool winds
will no doubt help the withers for quality manufacture. This very
important aspect has not been considered by the environmentalists,
probably because of their lack of knowledge! I was a young
assistant superintendent in Maskeliya in the late sixties when the
Maskeliya Oya reservoir was being built. Prior to 1969, Maskeliya/Upcot
teas never fetched more than the High Grown Average, the only exception
being Gartmore which is situated on top of a hill. The prices
obtained by the Maskeliya teas were far below those fetched by Nuwara
Eliya and Bogawantalawa products. However, there
was an immediate impact on tea prices soon after the reservoir was
filled, with prices going up throughout the area from Maskeliya
to Upcot. It is be interesting to note that estate marks such as
Laxapana, Moray, Brunswick, Strathspey, Alton, Gouravila and Stockholm
became famous only after 1969. The Sri Lanka Tea Board records (if
available) will prove these facts. The late S.
Thondaman, a highly respected leader and astute politician, would
never have agreed with the environmentalists on this issue. As a practical
man he would have made his own assessment before coming to a conclusion.
During his life time as a senior Cabinet Minister of both the UNP
and the PA governments, he never objected to this project although
he knew well that some of his people would get displaced. He always
looked at the positive side of the proposal and the benefits that
his people would derive eventually. 'Letters
to the Editor' should be brief and to the point.
Address them to: 'Letters to the Editor, The Sunday Times, P.O.Box 1136, Colombo. Or e-mail to steditor@wijeya.lk or stfeat@wijeya.lk Please note that letters cannot be acknowledged or returned. |
||||||
Copyright © 2001 Wijeya Newspapers
Ltd. All rights reserved. |
