Sunday, January 11, 2009

Welcome 2009………What a way to start

“Greed, for lack of a better word, is Good” said Gordon Gekko in a 1987 film “Wall Street”. B Ramalinga Raju took it to heart and acted on it.


The Satyam drama has hit us square in the face and it has been a KO punch to the employees, clients, non-promoter shareholders, regulators, State and Central Government, the IT industry and many other stakeholders.


Much has been said and written on this and in the coming days tomes shall be generated. Officers shall investigate through mountains of information and give their verdict. Raju and his band of “corporate pindaris” may yet be found guilty and may be spending the rest of their lives in the slammer.


This is corporate-politician nexus, crony capitalism, manipulation, deceit, treachery all rolled into one and at its worst.


Is that it? – Just a Corporate fraud………or something more


What is more serious and unpardonable, Satyam has inflicted a grievous wound to

- Our faith in ourselves,

- Our belief and capability to build world class businesses

- Our capacity to rise above the murkiness and create something in an atmosphere of transparency and fairness,

- Our capability to rise without a powerful surname, and


- Our trust.


Our faith and trust has been trampled upon with impunity whilst presenting a straight face to the world. This is a letdown of Himalayan proportions. We now have to be apologetic for this skeleton in our cupboard.


We shall view every entrepreneur and his success story with a jaundiced eye half expecting a cooked up story. We shall view every big company with suspicion. There will always be a thought lurking whether we are being taken for a ride.


Who or what can we trust hereafter?


Does this whole episode have a good part to it?


I think the financial markets will be ruthless and any Company / Entrpreneur who cannot stand to exacting standards and high levels of scrutiny will be dumped to the trash bin and sumptuously reward the honest.


Am I being utopian? Is this too much to ask? ……..in a system that has institutionalized corruption and entrenched interests first enrich their small closed clubs to the complete exclusion of everybody else.

16 comments:

swaps said...

Initially, I empathized with the Chairman....reasoned he was desperately trying to retain control. People are known to do things...they are doing. Only this one fell apart.

What about the CFO, he is most despicable.

But all in all, it holds mirror to the fallen standards of our society, that elects people who back any businessman if the price is right.

Vikram said...

On the other hand, this is also an opportunity. To strengthen oversight, to punish the guilty strongly (which we fail to do so often) and demand more transparency in business.

I think the entrepreneurs will keep coming, India just has too many of them and this is a good thing. But they should know after this that lies will ultimately be found out.

swaps said...

Something ails India.
When it is time for retaliation, we send 'dossier of evidence'.
When it is time to commit suicide, people write apologetic letters.
When did we acquire this fetish for writing letters??
These are hardly the signs of an 'emerging power'.

Indian Home Maker said...

I agree with you, and Vikram also,
I think the financial markets will be ruthless and any Company / Entrpreneur who cannot stand to exacting standards and high levels of scrutiny will be dumped to the trash bin and sumptuously reward the honest.
There are no two ways about it.

There is no other way.

Vinod_Sharma said...

Michael Douglas would have said today that his statement about greed was an understatement...greed is actually great. No, even that does not do justice to what we have seen in the Satyam fiasco and in Wall Street.

"Greed is King". Has been, will be. And increasingly so in a world that defines almost everything in term of bucks...black bucks may be an endangered species in the wild, but in the corporate jungle, their population is exploding...

You are being utopian Mavin...the system in India has not just institutionalized corruption, it has turned it into a fine art respected and prized more than a Hussein painting!

As the Maytas saga unfolds more and more, we will get to know, at least in whispers, that the amount of money stolen by everyone in the system is much, much more than Raju hinted at. I will not be surprised if, at the end of it, everyone gets away with this murder lightly, thanks to the involvement of those at the top of the power heap, our lax judicial system and some great lawyers who are posed to make the biggest killing of their lives!

Gopinath's "Artickles" said...

Yes Mavin. Money makes the world go round. As Vinod puts it Greed is King. What do people who want to live a decent earning from their lifetime savings do? Suspicion can kill the equity markets. But i guess there will be new greedy players who will drive markets again. Because there is no dearth of people wanting to make a killing and a pile - means dont matter. After they have been arrested, they can always take recourse to the "chest pain" excuse to move from the prison to a five-star hospital.

manju said...

Mavin, the whole Satyam saga is so very sad. Corruption is institutionalised, and everyone is involved. So who will scrutinise the companies?

There is a Vigilance Department to scrutinise the workings of various government departments. But who will keep tabs on the Vigilance Department which is said to be the most corrupt of all?

BTW, I appreciate the balanced way you have written, without any 'drama'.:)

Mavin said...

Swaps

The rot has set in deep like termites to woodwork.

One option is to painstakingly clean the infestation or let fire burn the whole structure down and then build afresh.

The point is which option helps society bring in change with least pain and disruption.

Mavin said...

Vikram,

Yes, Logically it should. I guess there are too many fingers in the pie and the scramble is to protect the politicos.

Let us hope for the best. It is very easy to derail such investigation and raise inane objections or divert attention.

The latest I saw in the news bulletin was - The IT authorities had prepared a tax evasion report in 2002 and accuse the NDA govt of inaction under pressure from TDP govt in AP.

The intent to pursue the culprit is not there and therefore the theatrics.

Mavin said...

Vinod,

Absolutely bang on....Hang on to your seats and wait for the murky details to unfold....

You ain't seen nothing yet.....


IHM,

Absolutely right...but ironically it will be circumstances that will make it happen and not the system.

Some lucky bloke might still get through.

Mavin said...

Gopi,

We will read details of how Raju used an Indian toilet and the stuff he ate and the comic books he asked for.

Wonder whether he asked for Superman/Spiderman or of Mr. Natwarlal.


Hello Manju

Howz you this new year....

The morning newspapers are good entertainment these days.

Corruption.....as normal as day and night..let us make a difference by resolving that we individually will not be corrupt.

Vinod_Sharma said...

That's a good one Mavin...Natwar Lal! Raju ban gaya Natwarlal!

swaps said...

The whole house has to burn down...this is a terminal case.

Smitha said...

Mavin, What a way to start the new year indeed! To be honest, I am so convinced that this is just the tip of the iceberg! Cannot believe that Ramalinga Raju could stage such a fraud for 7 yrs and nobody knew! I am sure will see a lot more as the saga unfolds.. Lets just hope that the rot is controlled and stemmed and that no other Indian companies come out with such fraudualent balance sheets and who knows what else!

Krishnan said...

Mavin, Sathyam fiasco is a rude shock to the IT industry in India. All along there was a myth that IT industry in India is highly ethical and employee-friendly, but his myth has been busted once and for all thanks to Ramalinga Raju. It saddens me to know that a person, who built a huge IT empire from scratch, would bend down so low...

Mavin said...

Swaps

Drastic remedy....with a lot of pain. I have no ready alternative in mind.


Smitha

There are many Indian companies but have some how managed to escape as their size is much smaller. The Capital Market, however, does suspect that atleast 15 - 20% of Companies regularly fudge their accounts.

This may be the proverbial tip of the iceberg.


Krish

Now we can legitimately ask

"Did he really build the fourth largest IT company or was it just make-believe.