The Americans are masters at finding heroes, and heroines in the midst of the most sordid affairs. In the case of Enron, it didn't take them long to unveil Sherron S. Watkins, a senior vice president at the company who'd written to chairman Kenneth Lay last year warning that Enron could ''implode in a wave of accounting standards''.

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	A Better Bill Of Fare?
	Who's Better, Who's Best?
	Beyond The Wall
	Gone In 60 Seconds

Fine, you've had your fill of Enron, know of Watins and fellow-canary Margaret Ceconi, a former sales manager at Enron Energy Services who too did some letter writing to Lay. Why, you even know about Veba, a Dusseldorf based utility that found Enron Corp's ''aggressive accounting'' offputting enough to call off a merger. But do you know of the cozy geographical relationship a Chennai-based diversified business group shares with the firm that audits the accounts of several of its companies? The audit firm's offices are located within the corporate headquarters of one group company. So much for the line separating internal and external auditors.

The Enron-Andersen nexus shouldn't have happened, but the shock exhibited by the accounting fraternity comes across as a bit of a sham. Come on, wasn't it just in 1999 that Pricewaterhouse Coopers asked its employees not to invest in companies whose accounts they audited? So, when Rathin Dutta, the Managing Partner of Pricewaterhouse Coopers' Indian operations, says: ''Ninety-nine per cent of auditors of any standing are above board, but there are a few who have done questionable deeds,'' one can't help but wonder whether Dutta has let professional pride cloud his sense of numbers just this once. Still, Dutta does concede that India's prevailing code of corporate law allows companies to get away with a simple auditor's comment tucked away in an obscure corner of their financial statement. In accounting speak, these are called 'qualifying statements' and have, in the past-notably in the case of Ceat in 1997, and Shaw Wallace in 1995-been enough motivation for the companies concerned to clean up their act. The better governed companies do things differently. When, in 1995-96, it looked like ITC may well have been party to some questionable foreign exchange transactions, the company instituted independent audit committees. ''We felt our shareholders must be given an exact picture,'' says K. Vaidyanath, Executive Director, ITC.

To be fair to the profession, though, there's little audit firms can do apart from 'qualifying the accounts and expressing reservations'. They do have the option of resigning a client, as Lovelock and Lewes did with Shaw Wallace but there is nothing to stop another audit firm from taking on the business. Then, there's the issue of familiarity breeding an uncalled for nexus. Most audit firm, client relationships seem to transcend time: Lovelock and Lewes has been auditing ITC's accounts for more than 30 years. There's nothing wrong in that, but it may help the cause of governance to have a company's accounts scrutinised by a fresh pair of eyes every once in a while. Rahul Roy, a senior partner at audit firm S.R. Batliboi (an Ernst & Young associate) says the Institute of Chartered Accountants of India is built for the role of a watchdog, as long as it ''ensures the sanctity of the profession without hindering business processes''. That's another fine line, but the business of accounting is all about such fine boundaries, and it is evident that Andersen crossed several.

--Suveen K. Sinha with additional reporting by Debojyoti Chatterjee

LEGISLATION
Back To Babudom
The Competition Bill in its proposed form will make it virtually impossible for market leaders to think bigger.

Trust-busting begins in earnest

If you let policy-makers who have no clue how industry works make laws what can you expect? The Competition Bill, for one. In utter disregard to the global nature of business, the proposed bill makes it virtually impossible for market leaders to grow through M&As. Forget that, if your company's production or marketshare increases, it could be the subject of an investigation by the proposed, but powerful, Competition Commission of India. Check out some of the other absurdities in the bill:

• In an acquisition, if the combined turnover exceeds Rs 3,000 crore or assets top Rs 1,000 crore, a pre-merger notification would be required.

• What constitutes 'unfair pricing' is not explained; thus if you price above competition you are likely to be pulled up, and if you price below, then that could be predatory pricing.

• If you cut production, you are denying consumer supplies, and if you step up production, you are squeezing competition out.

• Points out a former Andersen honcho: ''In effect, the proposed bill empowers bureaucracy to regulate and control the growth of individual entities.''

Critics of the bill point to other flaws. For example, linking asset size to competitive clout is fundamentally wrong, they say. Also in the Indian context, an asset classification of Rs 1,000 crore of a single company potentially targets least 144 companies for anti-dominance action. Argues Ashwani Puri, Head (Corporate Finance), Pricewaterhouse Coopers: ''Why should asset size be the criteria for determining anti-competitiveness.? It should be based on the market size of the industry and the marketshare of the players.''

That's not all. The Competition Commisson of India can initiate action on receipt of a complaint from any individual, or "suo moto''-that is, on its own even when there is no complaint. Corporate India believes that such sweeping powers will lead to the CCI controlling actions of the dominant enterprises, such as Reliance, Tata Steel, Gujarat Ambuja, or even Bharat Sanchar Nigam Ltd.

At a time when import tariffs are coming down and the rules of competition are getting rewritten, the Competition Bill promises to take corporate India back to the days of the Licence Raj. And you thought we live in a competitive 21st century.

-Ashish Gupta

PRODUCTIVITY
A Better Bill Of Fare?
There are 21 economic bills waiting before Parliament. And wait they will, till after Budget.

Last year, 2001, wasn't a very good one for the business of governance. In 136 days and 816 hours of business the Indian Parliament managed to clear a mere 62 bills. And in a country where the primary challenge revolves around the economy-and not the standard of the International Cricket Council's match referees-just one of those 62 bills had something to do with business. It isn't as if there are no great economic issues that need to be addressed: at last count there were 21 economic bills waiting before Parliament and revolving around critical issues. These include the Communications Convergence Bill, which is critical to the future of the telecom, infotech, and broadcasting businesses in India and the Electricity Regulatory Commission (Amendment) Bill, which is expected to help clear up a fairly messy sector.

The budget session, as the period that starts on February 25 and concludes on May 17, with a three-week hiatus in between is known, is unlikely to change anything. The main opposition party, the Congress, which enjoys a majority in the Rajya Sabha has announced that it will oppose the Fiscal Responsibility and Management Bill, the Industrial Disputes Bill, and the Amendment to the Contract Labour Act. With most of the session likely to anyway be spent rubbishing, or defending Yashwant Sinha's Finance Bill for the year (depending on which side you are), the core business of Parliament this session will be politics, not business.

--Ashish Gupta

STATE-OF-BEING
Who's Better, Who's Best?
Uttar Pradesh fluid political history of the past 10 years hasn't been good for its economy

Ten changes in government and six impositions of president's rule-that's UP's track record since 1990. In this period, the state's per capita Net State Domestic Product (NSDP), has increased from Rs 7,263 in 1990-91 to Rs 9,765 in 1999-2000, the last year for which the figure is available. In the same period, Andhra Pradesh's per capital NSDP zoomed from Rs 4,531 to Rs 18,625. And the state's fiscal deficit was the least, 4.3 per cent of NSDP, in 1995-96, when it was under President's Rule. ''UP is stuck in a vicious circle triggered by poor governance and high population growth,'' says B.B. Bhattacharyya, Director, Institute of Economic Growth. According to him, a poor law and order situation and the lack of political will in UP has put off investors. So, while smaller, and more business friendly states like Andhra Pradesh, Karnataka, and Maharashtra have moved on, UP, despite its wealth of resources (like the region that is the country's second largest software exporter, NOIDA), has only managed to go back in time.

-Swati Prasad

CMs' Ball: Mulayam S. Yadav DEC 89-JUNE 91; Samajwadi Party (SP)-Janata Dal DEC 93-JUNE 95; SP-Bahujan Samaj Party (BSP)	Kalyan Singh JUNE 91-DEC 92; BJP SEP 97-OCTOBER 97; BJP OCT 97-NOV 99; BJP-BSP	Mayawati JUNE 95-OCT 95; BJP-BSP MARCH 97-SEP 97; BJP-BSP	Ram Prakash Gupta NOV 99-OCT 2000; BJP and its allies	Rajnath Singh OCT 2000-; BJP and its allies

NEIGHBOURHOOD
Beyond The Wall
A quick recap of what Zhu Rongji's six-day visit means for Indian business.

Jan 14, Delhi: Zhu signs an agreement on tourism and a Memorandum of Understanding for cooperation in space, science, and technology.

Jan 15, Delhi: The two governments announce that the volume of Indo-China bilateral trade has crossed the $3-billion mark. China National Metals and Minerals Import and Export Corporation, one of the 19 companies with a representative accompanying Zhu, proposes an increase in metals and minerals trade with India by $125 million. The company signs two MoUs with Ispat and Mark Ridge.

Jan 16, Mumbai: Zhu says China and India should collaborate with and complement each other, not compete. They should strive to treble bilateral trade to $10 billion, he says. China's Eastern Airlines announces commencement of services between Beijing and New Delhi from March 28, 2002.

Jan 17, Bangalore: Zhu sings the collaboration tune again and says India and China can work together. ''You are no. 1 in software and we are no. 1 in hardware. If we put hardware and software together, we are World No.1,'' he says at the Infosys campus. And in a characteristic burst of spontaneity, he gives Infosys the go-ahead to set up office in Shanghai.

METERMAN
Gone In 60 Seconds
A Kolkata entrepreneur vends a pre-fab structure that can solve India's parking problems.

Mundhra and the Rawdon Street SimPark: city-saver

The grand-uncle, haridas mundhra perpetrated a scam that forced a finance minister (T.T. Krishnamachari) to resign, and was sentenced to 22 years in prison. But the grandnephew, Raghav Mundhra could go down in history as the man who solved the country's parking problems. Mundhra's baby is the SimPark Parkomat (Simpark also happens to be the name of his company), a multi-level car park, that can fit in twice the number of cars a conventional carpark can in the same space. The basis is an open system of construction-the park looks like the combination of a neat scaffolding and a set of Lego blocks favoured by Godzilla's kids-that uses pre-fabricated parts. Result? A carpark with a 219-car capacity can be installed in 120 days; dismantled in 60.

Mundhra's first Parkomat, built under a Build, Own, Operate, Transfer agreement with the Calcutta Municipal competition is already operational-a 1,268 square metre structure that houses 219 cars in three levels at Kolkata's busy Rawdon Street intersection. ''Everyone recommended I go to Hyderabad, Bangalore, or Chennai, but things worked out for me in Kolkata,'' says Mundhra, a city-loyalist. Now, he plans to take the concept national. Will it work? Well, harassed city planners should be willing to give anything a try.

-Moinak Mitra