Вы находитесь на странице: 1из 23

Ethics in Business

Function
Finance
Presented by
Syndicate 7 & 8
Ethical and Unethical
in Finance

Syndicate 7 Syndicate 8
Anthony 29117005 Septarina Pratiwi 29117072
Asri Marwa U. 29117037 Lazuardy K. Sadewa 29117149
M. Arif Hidayat 29117127 Harris Kristanto Yondi 29117181
Riska Setiawati 29117254 Arfan Nur Akbar 29117246

2
1. ▪ PT Aneka Tambang Tbk.
Ethical in (ANTM) decided to pay
Finance dividend of Rp 48 billion

▪ PT. Adaro Tbk. Receives Great


Taxpayer Award

3
PT Aneka PT Aneka Tambang Tbk (ATNM) decides to pay dividend of Rp 48
billion. The shareholders also approved in the Annual General
Tambang Meeting of Shareholders (AGM) at Hotel Borobudur.
Tbk (ANTM)
decided to The dividend distribution of Rp 48 billion represents 35 percent of
net profit in 2017 of Rp 136 billion. The dividend per share of
pay dividend book year 2017 is Rp 1.99.
of Rp 48
The shareholder also approves a 65% profit utilization or Rp 88
billion billion as the current year's profit attributable to the owner of the
parent.

4
PT Aneka PT. Aneka Tambang, Tbk already did the ethically right thing
based on deontological ethics, consequentialism-utilitarianism,
Tambang and social contract theory.
Tbk (ANTM) ▪ From Deontological point of view, it is the right action to do
decided to for a company to pay its shareholders’ dividends;
From Consequentialism-Utilitarianism point of view, paying
pay dividend ▪
shareholders’ dividends will lead to rise in investment because
of Rp 48 investors will see PT. Aneka Tambang, Tbk as a trustworthy
company to invest their money.
billion
▪ Paying dividends is also an ethically right thing to do from
Social Contract Theory because in the agreement that made
before, investors will get dividends from the company’s profit
if invest their money in the company.

5
Adaro The Directorate General
of Tax awarded a large

Receives taxpayer to PT Adaro


Indonesia. Finance

Great Minister Sri Mulyani and


Director General of Taxes

Taxpayer Robert Pakpahan gave


the award to President

Award Director of PT Adaro


Energy Tbk Garibaldi
Thohir

Adaro in 2017 has contributed to the country totaling a total of 774


million US dollars. The figure consists of 346 million dollars in royalties
and 428 million dollars in taxes.

6
PT. Adaro already did the ethically right thing based on
deontological ethics, consequentialism-utilitarianism, stake
Adaro holder theory, and social contract theory.
From Deontological point of view, it is the right action to do for a
Receives company to obey government’s regulation by pay its taxes to

Great government.
From Consequentialism-Utilitarianism Perspective, paying taxes
Taxpayer on time will prevent their company to pay a fine from late taxes
payment.
Award It is also an ethically right thing to do from Stakeholder Theory
Perspective because by paying taxes to government, it shows
that PT Adaro is committed to contribute to development of
Indonesia.
At the end, paying taxes is a mandatory from government to every
companies in Indonesia, by obeying the taxes regulation, it shows
PT Adaro is ethically right from Social Contract Theory
perspective.
7

“To be ethical,
never think of anything unethical.
To be moral,
never hurt anyone.”
― Debasish Mridha

8
2.
Unethical ▪ The ‘Satyam’ Computer
in Services Scandal
Finance
▪ Bernard L. Madoff Investment
Scandal

9
The ‘Satyam’
Computer
Services
Scandal

10
▪ Satyam also underreported liabilities on its balance sheet. Nearly
$1.04 billion in bank loans and cash that the company claimed to
own was non-existent.
▪ Satyam overstated income nearly every quarter over the course
The ‘Satyam’ of several years in order to meet analyst expectations.
Computer ▪ Mr. Raju falsified the bank accounts to inflate the balance sheet
with balances that did not exist.
Services
▪ Mr. Raju also revealed that he created 6,000 fake salary
Scandal accounts over the past few years and appropriated the money
after the company deposited it.
▪ The company’s global head of internal audit created fake
customer identities and generated fake invoices against their
names to inflate revenue.

11
The ‘Satyam’
Computer
Services
Scandal
Table-2 depicts some parts of the Satyam’s fabricated ‘Balance
Sheet and Income Statement’ and shows the ‘difference’ between
‘actual’ and ‘reported’ finances.
What factors did influence Mr. Raju to
do unethical actions within the
Company ?
• greed,
• ambitious corporate growth,
The ‘Satyam’ • deceptive reporting practices—lack of transparency,
Computer • excessive interest in maintaining stock prices,
• executive incentives,
Services • stock market expectations,
Scandal • nature of accounting rules,
• ESOPs issued to those who prepared fake bills, high risk
deals that went sour,
• audit failures (internal and external),
• aggressiveness of investment and commercial banks,
• rating agencies and investors,
• weak independent directors and audit committee, and
• whistle-blower policy not being effective.
What theories are linked with the
scandal?
Stakeholder Theory

The ‘Satyam’ According to the scandal, Satyam that managed its stakeholder relationships not
effectively will not survive longer and perform better due to its ethical egoism done
Computer by the company. In addition, Satyam didn’t fulfil the four uses of stakeholder theory,
because Satyam only focused on one personal interest over shareholder and
Services stakeholder which have participation in deciding what best and not within the
company.
Scandal
Social Contract Theory
Satyam doing manipulation data of their report to the public. Satyam company have
a contract with public or shareholders serve transperancy, accountability,
responsibility, indepedency, and fairness. The manipulation of their report to the
public will broke the contract because it makes public or shareholder harmed.
What theories are linked with the
scandal?

Deontological Ethics
The ‘Satyam’ There are data manipulation by Mr. Raju to make the company look better. The data
Computer manipulation based on business principles could determine as fraud, and based on
deontological ethics fraud is wrong to do in business activity.
Services Ethical Egoism
Scandal Mr. Raju ought to act in his own interest and some particulars individuals. Therefore,
he and the Satyam board, including its five independent directors had approved the
founder’s proposal to buy the stake in Maytas Infrastructure and all of Maytas
Properties, which were owned by family members of Satyam’s Chairman, Ramalinga
Raju, as fully owned subsidiary for $1.6 billion. Without shareholder approval, the
directors went ahead with the management’s decision. The decision of acquisition
was, However, reversed twelve hours after investors sold Satyam’s stock and
threatened action against the management.
Solutions

▪ As a corporation Satyam company should implement


The ‘Satyam’ Good Governance Corporate (GGC) to serve
Computer transperancy, accountability, responsibility,
Services indepedency, and fairness of their business activity to
give trust to public or shareholder.
Scandal
▪ Company must have great leader  Mr. Raju as the
chairman or leader of Satyam company create
harmful/corrupt culture with his manipulative
strategies and it will influence the entire people on the
organization.
Bernard L.
Madoff
Investment
Scandal

17
▪ The Madoff Company promises a huge and accountable rate
of return. His client was rapidly widespread because of large
returns that spread from mouth to mouth. Celebrities such as
Steven Spielberg, Larry King, and Kevin Bacon, as well as
major financial institutions have finally "left" the money to
Bernard L. Madoff.
Madoff
Investment ▪ Madoff uses the Ponzi Scheme which is giving the lure of high
returns to investors. This investment scheme never really
Scandal makes money. He just plays the money of new investors to
pay the old investors' yields. This scheme is usually
characterized by an investment strategy that is never opened
explicitly to investors.

18
▪ In the case of Madoff, the collapse began to occur when
clients simultaneously demand a simultaneous return of up to
7 billion dollars. Unfortunately, when Madoff only had $ 200
million to $ 300 million to give. He cannot pay for it so this
investment fraud case revealed.
Bernard L.
Madoff ▪ Madoff's tragic fate occurred during his imprisonment, his two
Investment children died. Mark died suicide at the age of 46 years on the
two-year anniversary of Madoff's arrest. Andrew died at the
Scandal age of 48 years due to cancer.

▪ Madoff was sentenced to 150 years in prison. Meanwhile, the


process of investor refunds is still ongoing.

19
What theories are linked with the
scandal?

Stakeholder Theory
Bernard L. In light of the fact that Madoff expresses that the main
Madoff obligation that a businessman has is to amplify benefit for
the proprietor and or the stockholders, in this case,
Investment
investors. So Madoff clearly was not intend to expand
Scandal benefit for his investors, contrarily, he was intentionally
taking their money and losing it significantly.

20
What theories are linked with the
scandal?

Deontological Ethics
Bernard L. All activities are performed with some sort of overlying
Madoff standard. When he is conducting the Ponzi scheme and
Investment no problem were raises, he more likely to know that in the
long run somebody would get on and discover all that he
Scandal was doing. Therefore, he was not settling on rational
choice and he paid cost of that irrational decision.

21
Solutions

▪ Hold an ethics and morale training and development


program to the employees that when there’s
Bernard L. something wrong with the management, they can
Madoff speak up rather than just follow the order from the
supervisor/board of director.
Investment
Implement Good Governance Corporate (GGC) to
Scandal ▪
serve transperancy, accountability, responsibility,
indepedency, and fairness of their business activity to
give trust to public or shareholder.

22
Thank you very much
for your time

23