| Hony.
Editor |
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Dr.
Bindi Mehta
(Director,
Research at ICSI - CCRT, Formerly, Chief economist, CRISIL)
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| International
News- March, 2003 |
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A new report on Enron fuels US crackdown
on
Corporate tax fraud
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The
names of Senator Chuck Grassley could
join those of Sarbanes and Oxley as a
Congressional tormentor of corporate America
after releasing a report on the tax practices
of the failed energy trader Enron.
The
2,700-page report, Mr. Grassley said,
“reads like a conspiracy novel, with
some of the nation’s finest banks, accounting
firms and attorneys working together
to prop up the biggest corporate farce
of this century. Enron was a house of
cards. Schemers built that house.”
With
Enron’s co-operation, tax experts working
for the joint committee reviewed tax
return information, tax shelter opinions
from law firms, letters from accounting
firms, promotional material and internal
Enron documents that documented how
the schemes worked.
In
the years leading up to its December
2001 collapse, Enron paid remarkably
low amounts of federal tax - $63 million
in its last two years and none in the
years 1996-99. Among the measures introduced,
or likely to be introduced, to curb
corporate tax abuse in the US are:
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The
Tax Shelter Transparency Act, which
created a mandatory disclosure regime
for tax shelters to allow the IRS
to enforce illegal transactions. Mr.
Grassley said he would review the
measures in light of the Enron report.
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The National Employee Savings and
Trust Equity Guarantee (NESTEG) Act,
which had been sidelined by the Senate’s
Democratic members, would be re-introduced
to tighten protections for retirement
plan participants. The Bill would
also ban so-called “off-shore rabbi
trusts” used to hide executive compensation
from creditors, including the IRS.
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A renewed attempt to pass legislation
reversing the expatriation of offshore
profits.
Mr.
Grassley’s closing remarks are of interest.
He said: “We know Enron isn’t the only
company that is engaged in abuse, and
it won’t be the last to try. But the
day of reckoning has come for those
who peddle abusive tax products. We’ll
hunt them down, shut them down, and
do whatever it takes to purge this cancer
from our system. It may take years,
or it may take only months. But the
game is over.”
Source:
Accounting Web
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| Murthy,
Nilekani are ‘Asia’s Businessmen’ |
Fortune has named Infosys’ top duo, Mr. N.R. Narayana Murthy
and Mr. Nandan Nilekani, as Asia’s Businessmen of the year 2003.
They
are the first Indians to receive the awards, the sixth in the
series, and are also the first awardees to share it, according
to Fortune, which announced and conferred the awards on them
here on Sunday.
Mr.
Murthy as Infosys’ Chief Mentor and Mr. Nilekani as its CEO
stood out for their shar business acumen and Infosys’ excellent
corporate governance.
They
“have had a remarkable impact on Asian business, pioneering
a powerful business model that taps into India’s pool of inexpensive
… engineers to deliver quality information technology services
and transforming the country into a global player in the IT
industry,” said the Fortune International Editor, Mr. Robert
Friedman. The company’s business model is widely copied and
it could be the only corporation I the world to publish financial
statements in accordance with the accounting standards of eight
countries, according to Fortune.
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©
2001 Academy of Corporate Governance |
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