The Satyam Fiasco

They call it the Indian Enron, but I prefer calling it our own Satyam Fiasco. What caused it is the question on everybody’s mind, but to be frank no one knows what actually has happened to the company. Supposedly the company has over cooked its balance sheet, it has “cooked its books” as they say in commercial terms. The greed of a few has put the future of the stakeholders at stake.

This raises big questions on the corporate governance of Indian industries. It cannot be that such big wrong doing (Rs 7000 Crores) has taken place with the involvement of only one or two persons. What were the Board of Directors doing, what was the role of the independent directors, were they actually incapable or complicit in the crime. To play with the future of 40000 employees is just unpardonable. The role of auditors is most significant in such case because they are the people who should have brought the cat out of the box. It seems the auditors were also complicit in the crime. Banks too cannot be spared, usually where such big money is involved banks usually are one of the culprits, remember ketan parikh and madhavpura bank. The role of the politicians can never be ruled out especially when a lot of property is involved that too in a single state. So all in all it seems like the entire machinery got together in this case.

Now what can be the way out or the way that can cause minimum damage to the company and its stakeholders. The first and foremost task ahead of the newly appointed BODs is to secure the future of the 40000 employees. Truly speaking the government and the regulatory body(SEBI) have been quite quick in their actions, this has sent a positive signal to the clients as well the FIIs. Now the way forward will be to take the case to its logical conclusion and shouldn’t be allowed to get lost in the legal and political tangle as it could prove to be counter productive. Take enron as an example which was probed, prosecuted and executed within 3 years of the case coming up. This case should be taken as learning by the concerned bodies and see to it that this kind of an incident doesn’t get repeated.

Finally to conclude one satyam doesn’t represent entire Indian IT sector. The true character of any institution is tested in the time of adversity and I believe that Indian IT industry has matured enough to come out of this mess winners.

Thanks,
Yash