t Marcellus we never stop harping on the importance of clean books of accounts and why companies with cooked up numbers have caused major wealth erosion of shareholders/bondholders/banks over the years. Among other things, companies must pass our forensic audit to become part of our portfolio.
This article is an excerpt from Vinod Rai’s new book ‘Rethinking Good Governance’ and talks about the (mis)management of a renowned Thiruvananthapuram temple. Vinod Rai became a household name in India after the 2G and Coal Scam report he published during his tenure as the Comptroller and Auditor General of India. The Supreme Court of India appointed Vinod Rai to conduct a special audit of Kerala’s Shree Padmanabhaswamy temple. The temple was in the news for the discovery of huge amount of gold in its vaults and the consequent accusation of mismanagement of accounts & pilferage.
Mr. Rai gives various instances of mismanagement in the temple in his books which is an eye opener.
“The temple did not have a system of ascertaining the weight and purity of gold and silver articles before handing them over to jewellers for melting and purification for ornamentation works. For example, the weight of the gold taken out from the cellars for melting, according to the weight recorded by the gold work contractors in a particular transaction, was 887 kg. On melting and purification of the gold, the pure gold returned was only 624 kg. The loss in the process was 263 kg, which was nearly 30 per cent, indicating that there is no benchmark for the percentage of loss that should be permitted in the purification process. What was returned by the jewellers after purification was accepted, on trust, as accurate. This obviously led to speculation and allegations…….. These are some of the issues that seem to have beset the temple and its administration over the years, thereby leading to the conclusion that its management is lax and that it has consequently suffered severe loss of revenue, valuables and real estate.”
It now seems that cooked up books of account are also one of the major reasons for the loss of GOD’s OWN WEALTH.
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Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.
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