Satyam, Hih and Lehman Brothers

Ethics Assignment

Part one

Corporate Failures: Satyam, Lehman Brothers and HIH

There’s Always Cheddar in the Mouse Trap, Baby

Ethics and Accountability ACCT1081

Assignment 1

Class Lecturer: Victor Borg

Class Time: Wednesday 12:30-3:30

Jason Lau 3286113

Julian Chang 3378897

Fadi Sana 3414594

Contents

Introduction 3

Scandal Background Information 4

HIH Insurance 4

Satyam Computer Services 5

Lehman Brothers 5

Similarities 5

Stakeholders 6

HIH Insurance 6

Satyam Computer Services 6

Lehman Brothers 6

Major Issues 7

HIH Insurance 7

Ethical 7

Legal 7

Accounting 7

Corporate Governance 7

Satyam Computer Services 8

Ethical 8

Legal 8

Accounting 8

Corporate Governance 8

Lehman Brothers 9

Ethical 9

Legal 9

Accounting 9

Corporate Governance 9

Similarities 10

Ethical 10

Legal 10

Accounting 10

Corporate Governance 10

Relations to Enron 11

HIH Insurance 11

Satyam Computer Services 11

Lehman Brothers 12

Remedies 13

Conclusion 14

References 15

Introduction

Businesses and greed come hand in hand. This can be welcomed as it is a driving force for companies to do well bolstering the economy and creating jobs. However, unbridled self-interest may cause a company or individual in a company to take unethical and unsustainable actions. Such actions may have various repercussions on the company involved and its stakeholders. In this report we will examine HIH, Satyam and Lehman Brothers to detail how a once successful company can be devastated by unethical and unsustainable actions and how these actions were allowed to happen.

Scandal Background Information

HIH Insurance

HIH Insurance was publicly listed on the Australian stock exchange. It was Australia’s second largest insurance company prior to in collapse in 2001.

HIH collapsed due to poor management. A deficiency of 7 billion dollars was the consequence of past insurance claims with insufficient provisions. HIH’s policies had been...