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Ernst and Young (E&Y) in Indian Corruption Investigation as awards itself Technology Tender for Indian Government Corporation Bank – Accounting Big 4 losing pristine image (PWC Satyam Scandal)

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Ernst and Young famous for being part of the Big 4 accounting firms has been caught in a corruption tangle as it awarded itself a tender for Technology Services for an Indian Government Bank.India’s top corruption agency CVC has banned Corporation Bank of India from hiring any technical or management consultant or doing any sort of new business in wealth management or insurance till its probe is complete.There was a massive breakage in government rules as Ernst and Young the management consultant to Corporation Bank of India set out a tender favoring itself.In a totally blatant conflict of interest,the tender was won by E&Y which was the lowest bidder in just 2 companies.According to ET,The source said Corporation Bank consulted Ernst and Young (E&Y) for preparing a proposal for the tenders. Later, the bank not only allowed E&Y to bid for the project but also revised the tender norms.

Note corruption is nothing new for the Big 4 firms with another one PriceWaterhouseCoopers caught red handed in the massive billion dollar Satyam corruption scam.Two of the partners of PWC were sent to jail in the fraud which involved cooking the books for almost 8 years.Having a Big 4 auditor is a must for any well known big public company.However the reputation of these Big 4 continues to get besmirched with newer scandals.It does not take a rocket scientist to guess that bribes were involved as rules were circumvented and Corporation Bank top brass was also involved.Government Tenders are a massive hotspot of corruption as they are opaque and powers rest with a few.Lack of transparency results in massive embezzlement of taxpayer money.Corporation Bank.Note Relaince India’s biggest company is facing an investigation along with the oil and gas regulator DGH.Recently LIC Housing Finance one of India’s largest housing finance companies was involved in a scam as well alongwith top official form other PSU Banks for taking bribes.This resulted in a massive stock price fall for a number of these companies.Expect Corporation Bank stock to take a similar dive hurting the shareholders.Investing in the Indian stock market has become more dangerous than ever where a corruption scam hides under every stone.Government companies which are considered safer by investors too are being proved problematic with PSU CEOs now being jailed for scams.India’s largest aluminium company NALCO CEO has been jailed for accepting gold bricks in bribes

CVC bans Corporation Bank from awarding tenders

CHENNAI: The Central Vigilance Commission (CVC) that probed irregularities in the public sector Corporation Bank has asked it not to issue or award tenders for appointment of technical, management consultants on retainer basis or for expanding the bank’s insurance, wealth and asset management business, due to violations of norms.


Abhishek Shah

One Response so far | Have Your Say!

  1. Sudheendra

    Any update on the CVC-CBI case that was announced for this ? E&Y was again appointed by the Bank in 2012.