By Michael Sidwell

“The basic problem in Afghanistan is not too much Taliban; it’s too little good governance. Afghans need a government that deserves their loyalty and trust; when they have it, the oxygen will be sucked away from the insurgency,” writes de Hoop Scheffer. “Crucially, Afghan officials must make the difficult choices necessary to create an efficient and corruption-free government in which its people can believe.”

De Hoop Scheffer’s remarks echoes those of the UN’s top envoy to Afghanistan, Kai Eide, who recently called the fight against corruption “one of the single most important issues for the future of the young democracy,” reports the UN News Service.

“We must all demonstrate – every day and at all levels that we reject corruption. The example we all set will shape the future. It can restore trust. It can bring development. It can meet the most basic human needs. It can turn resignation into hope,” said Eide during an event which was attended by Afghan President Hamid Karzai.

Similarly, US General Robert Cone, commander of the force that trains the Afghan army and police, told Reuters in an interview in December 2008: “The final point is corruption, corruption, corruption; it is endemic.”

According to Reuters, “Senior officers and Interior Ministry officials are renowned for taking a cut of the salaries of policemen, who then exact bribes from the populace to make up their pay. Public confidence in the force is undermined and the Taliban gain support.”

A New York Times article published in January claims that: “the state built on the ruins of the Taliban government seven years ago now often seems to exist for little more than the enrichment of those who run it.”

The article details how: “Everything seems to be for sale: public offices, access to government services, even a person’s freedom,” noting that US President Barack Obama “may be required to save the Afghan government not only from the Taliban insurgency – committing thousands of additional American soldiers to do so – but also from itself.

In response to de Hoop Scheffer’s comments, an Afghan foreign ministry spokesman, Sultan Ahmad Baheen, told the BBC that “the government was committed to trying to eliminate corruption.” Baheen also accused Nato member countries with a presence in Afghanistan of supporting “their own favourite warlords”.

In a parliamentary session in January, Karzai said, "We admit that there is corruption in our administration. But there is even more corruption regarding international aid. If we can stop this kind of corruption, God willing, our administration will soon become free from corruption," reports the BBC.

By Michael Sidwell

The scandal broke when Raju confessed to “filling the company’s balance sheets with “fictitious” assets and “nonexistent” cash in an extraordinary letter to the company’s board,” writes the International Herald Tribune (IHT).

Raju said that he had “falsified accounts for “several years” to stave off a takeover, however, accounting experts can’t explain how the reporting error went unnoticed, writes Bloomberg.

According to the BBC, “Satyam’s shares plummeted on the news by 75%, dragging down India’s stock main market by 7%.”

“Officials have seized documents and the nation’s accounting body is examining auditor PricewaterhouseCoopers LLC’s local unit,” according to Bloomberg.

In a bid to minimise the fall-out from the scandal, the Indian government appointed Deepak Parekh, chairman of HDFC Bank; Kiran Karnik, a former president of the National Association of Software Services Companies outsourcing industry body; and C.Achuthan, director of the National Stock Exchange and formerly of the Securities and Exchange Board of India, to the company’s board on 11 January (Financial Times).

Corporate Affairs Minister Prem Chand Gupta called the Satyam case “an aberration,” urging that the “credibility of the Indian corporate sector in general, and IT sector in particular, should not be allowed to suffer because of this,” reports IHT.

Many analysts say that the “chase for huge profits, and the desire to keep up with the break-neck speed of India’s $50 bn outsourcing industry’s growth rates that may have been behind Mr Raju’s motivation in fudging the accounts at his firm,” writes the BBC.

By Lydie Gerboin

“Wrapping up the biggest corporate corruption investigation in history, Siemens agreed to pay $800 million [€598 million] to settle a U.S. investigation by the Department of Justice and the Securities and Exchange Commission [SEC] into bribes it paid to win contracts,” writes Reuters. “It will also pay 395 million euros ($531.9 million) to resolve a similar bribes-for-business investigation in Germany.”

Siemens has also agreed to “appoint an independent monitor for up to four years (…) and to cooperate with the US Government’s continuing investigation in the case,” details Reuters.

The company will keep its “responsible contractor” status in the US, which means it will still be able to bid for government contacts, explains the BBC.

“From the mid-1990s until last year, units of the company paid kickbacks and bribes to win contracts from Iraq’s government in the United Nations oil-for-food program and for projects including commuter rail in Venezuela, mobile-phone networks in Bangladesh, power plants in Israel and traffic-control systems in Russia,” writes Bloomberg. The same article adds that: “None of the contracts won with illegal bidding will have to be surrendered.”

“We regret what happened in the past but we have learned from it and taken appropriate measures. Siemens is now a stronger company” said Siemens CEO Peter Löscher, according to CNN.

“Lawyers say that a growing number of companies are focusing on FCPA compliance issues,” reports the Financial Times. “Since January 2006, the SEC has brought 38 FCPA enforcement actions – more than were brought in total since 1977.”