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IJM Corp May Face Problems Doing
Business In India - Analyst
KUALA LUMPUR, Jan 31 (Bernama) -- IJM Corporation Bhd may face problems
doing business in India following a probe on the executive director of its
Indian unit, IJM (India) Infrastructure Ltd, that is said to be linked to
the Satyam Computer Services' fraud case.
According to an Indian daily "The Economic Times" IJM India executive
director Ng Chin Meng is on the list of 30 individuals being investigated
by the Indian Tax Authorities in relation to the fraud case by one of the
largest global information technology provider.
A local analyst told Bernama with the current economic gloom, any
defaults, delays or other bad news could impact a company's reputation,
especially if it involved corporate governance and shareholders'
protection.
"This could impact the company. If there are any pending investigation
(regardless if convicted or not), investors will avoid this kind of
company.
They will usually go for companies which have a good track record in this
kind of environment," he told Bernama when asked to comment on the impact
of such investigation on a public-listed firm.
IJM India had formed a joint-venture company with Maytas Infra Ltd, a
company controlled by Satyam's former chairman B. Ramalinga Raju.
The company was involved in the Mumbai-Pune Expressway and in the Gautami
power project in the Andhra Pradesh state. With the investigation in
progress, Indian authorities have halted ongoing projects by Maytas while
several contracts by Maytas with other parties have been cancelled.
Satyam, the fourth largest Indian software company, plunged into financial
mess after its founder Raju admitted that he had falsified the company's
accounts to show profitability.
According to "The Economic Times, Ng's name is in the list of 30
individuals, who have been linked with Satyam Group, of which the tax
authorities have sent to the Andhra Pradesh stamps and registration
department seeking information on the dealings and other transactions.
"In this current situation, with this ongoing investigation, the company's
reputation will likely be affected," the analyst said.
According to another analyst, India has contributed about 20 percent to
IJM group's total construction order book as of the third quarter for the
current financial year.
However, IJM Corporation chief executive officer and managing director
Datuk Krishnan Tan could not be reached for comments.
The Securities Commission, in its reply to Bernama, said it was ready to
assist the Indian authorities with regard to the investigation.
"The investigation into Satyam Computer Services is being conducted by the
Securities & Exchange Board of India (SEBI) and other Indian authorities.
"The SC is party to a multilateral cooperation arrangement amongst
regulators for the provision of cross-border assistance and will provide
such assistance if requested by SEBI," SC spokesperson said.
-- BERNAMA
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