Satyam-eva Jayate

95 Comments

The corporate malfeasance confessed to at Satyam has shocked the nation with words like “financial 26/11” and “India’s Enron” being used to describe this catastrophe for India Inc. Satyam has been subject to ritual humiliations like having their corporate ethics award withdrawn and being taken off stock indices. The economic pundits are baying for blood. On the board floor.

But what does the man in the street think of all this?

Let’s find out in this exclusive GB TV news report.

[Background music: Satyam Shivam Sundaram. Ishwar Satya Hain. Satya Hi Shiva Hain. Shiv Hi Sundar Hain. A haaa A haaaaaaa]

Samar is 16 years old and is in Class 11. This is what he had to say.

I don’t see what’s wrong in making a few untrue statements in the balance books. I mean come on dude. Everybody does that at school while doing lab reports. I mean how can one really get a straight line graph while plotting V vs I? It never happens. So you massage the data so that it “fits”. The teachers know it. The students know it. The teachers when they were students did it.

Mona is 33. She works in a cell center.

If you don’t have it, you pad it. Be they balance sheets or bra cups. That’s common knowledge. When prospective grooms come to our house, I always wear padded bras. My aunts told me to do so. Are they asking me to cheat? I don’t think so. And just to balance out that exaggeration, I also under-estimate. I say I am 25 years old.

And it’s not just the younger generation who are supportive of the management at Satyam.

Raghavan is 45. He works for the government.

[Angrily]

So what’s the crime here? Using shareholder money to buy shares in the company your son runs at outrageously elevated prices? I mean if you are dragged over the coals for looking after your family, what is a man to do? Apne to aapne hote hain. What next? Ban the Congress Party?

Lalaji is 65. He has run a grocery for 45 years now.

My dad always used to tell me “Before you decide to be Harishchandra, remember what happened to him. And let that serve as a warning.” I have always followed that dictum and every successful business has to. I keep a metal weight below my scales, I put small bits of stone in the rice, I adulterate the cooking oil. I have two ledger books.

It’s not just me. The dairy-boy who my wife buys milk from has more water than milk. The asli desi ghee I buy is hardly asli. Everyone is tampering with numbers and ratios. Thats how it always has been with dhanda-giri.

There is just one crime in business. Just one.

And that’s getting caught.

Not everyone was so outspoken however. When we asked Ajay, 53, himself an accountant how despite audits by a major accounting agency, nearly ninety four percent of the cash on Satyam’s books just does not exist, he merely smiled and said.

Magic !

In other news, unconfirmed reports suggest that the embattled CEO has been seen in half-sleeve shirts and suits and is reportedly currently working on developing 8 pack abs. This has lead many to speculate whether a “Ghajini” defense of anterograde amnesia may be mounted against a 7 year jail term, a defense that is intensely popular among powerful business owners. Viewers may recall that such a defense was successfully used by Sanjay Singhania, the telecom giant, to get an acquittal after he went on a murderous rampage for which he was not only accused of mass murder but also of gratuitously breaking all the laws of Physics and of good cinema.

Fade out music: (paraphrased song from movie “Gunda Mawali”) Raju awaara barsaat main, chori chori kya kar baitha…..

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95 thoughts on “Satyam-eva Jayate

  1. Nice post. I am confident there are other corporate giants (and lilliputs) with balance sheets as twisted as Satyam’s biting their nails. Mr. Raju jumped ship with an itchy conscience. Better than jumping off the train like Adolf Merckle.

  2. Sad and unfortunate day for Satyam employees and India in general… these 53000 employees now will default on their loans and pull out savings, adding to the already escalating fin crisis… and if PWC goes the Arthur Anderson way of Enron, that’ll be another large giant in the consulting world biting the dust.

  3. I think its time to bottom fish again. One enron doesnt make an American industry, one satyam doesnt make the Indian industry.Rem Buffett, “Be greedy when others are fearful and fearful when others are greedy”. This next drop, if it breaks the oct 08 lows, i think will be the perfect time to buy and hold.

    Wt the whole ethics thing…ya true it is a sad day. But then again, we always knew there were skeletons in the closet didnt we? Todays just the day its come out that’s all.

  4. I felt very bad when I watched it on TV. We Hyderabadis consider Satyam as one of our city’s assets just like Charminar and Golconda. But everything is gone now. However, Raju has done a good thing by revealing it all and not escaping to a faraway land with all the money unlike other businessmen.

    This PWC is not a rogue company. They got associated with GTB and later it got collapsed. And now Satyam. I think it should be bannded from India.

    Let us hope some good company takes over Satyam and provides job security for those 53,000 employees.

  5. People have started wondering : How reliable is RELIANCE. TATA kaun see chakki ka aata khila rahan hain. Is PATNI a tawayaf ?
    I have always been doubting whether Ghajini too really earned tens of crores.
    Last week I took an interview of a person who lost his job in a start-up. He used to work for Satyam six months ago. There’s no escame in times of doom.

  6. Hi Kishor,

    Unlike south India, Waste Bengal does not need to worry about such corporate greed. After all, there are no corporates left in Waste Bengal or willing to come here.

    Our concerns are more modest and desperate – preventing the takeover of our state by our next-door basket case neighbour.

    One can lose a job at Satyam in Cyberabad but find another job at Infosys down the street. But the Bengalis are in much deeper shit.

    In Waste Bengal, there is so much frustration that not just our livelihoods but also our land are being lost to invaders. No wonder many Bengali youths are training themselves to stop Bengal from going under.

    See: http://hindusamhati.blogspot.com/2009/01/hindu-samhatis-training-camp-at.html

  7. One more thing …. The software/IT/BPO boom in India may have already reached its peak and may be on a plateau soon. Other countries like China, Israel, Philippines are competing for a share of the pie.

    It may not be prudent for today’s high school students to keep betting on getting jobs at Infosys when they graduate from colleges during the next decade.

    It may be worthwhile for Indian youngsters to start considering alternate careers in emerging technologies that will be hot for the next 100 years: solar energy, nanotech and biotech.

  8. Kishor,

    Other states can only complain about a surfeit/excess of corporate companies and jobs. Karnataka, Andhra, Tamil Nadu, Maharashtra and Gujarat compete and fight to attract the best companies to do business – be it IT, Automotive or Petrochemicals.

    As a result, more and more educated Bengalis are migrating to these states (and to Gurgaon) to work and live safely.

    But in our Waste Bengal, it gets really interesting how the fight is going.

    On the one hand, Mamata Begum is so hell-bent on driving away corporates/industries away from Bengal – on the pretext that setting up of industries would mean land-grabbing (or grabbing land from the locals).

    On the other hand, Mamata and fellow politicians across the spectrum (CPM, RSP, Congress) are hand-in-glove with millions of Bangladeshi goons who continue to invade Bengal, get fake voters ID cards (from the political parties) and indulge in brazen land-grabbing from the locals.

    Lakhs of locals have fled from the border districts after losing their farms and homes, seeing their womenfolk/children raped, snatched and sent to the flesh trade … and of course, watching their cattle grabbed openly for the beef trade – all by the well-armed invaders.

    So you see how different our priorities are – While other states are concerned about going hi-tech (and its concomittant hassles), Waste Bengal is fighting a more basic problem – that of basic survival of its people.

    If you thought that the near-total genocide of Kashmiri Pandits was a tragedy, just wait till you see what Waste Bengal looks like in 2020.

  9. Garagaparru stands by Raju

    Spewing venom on those casting aspersions on Ramalinga Raju, a villager of Gangaparru said: “Don’t forget the fact that nearly 3,000 IT students from the district are working in Satyam Computers.” It’s a different matter that the villager is least bothered about the fate of over 50,000 employees who are on Satyam’s payrolls.

    This is precisely the reason why nothing will ever happen in India.

  10. well the silver lining is hopefully all the crud from the Indian market will be exposed..which is good in long term i guess.

  11. You know, when I started reading this post, I was appalled. My patriotic self got the better of me, but only for a while. The more I read, the more my common-sense started to knock at the door and I soon realized that this is probably true. This isn’t a report by a fundamentalist trying to portray Satyam, or more precisely Ramalinga Raju, in better light — it is, in fact, how people truly feel about doing businesses in India.

    Lalaji’s statements above remind me of the movie Guru’s protagonist, enacted by none other than our very own and competent Abhishek Bachchan. This is how you do business in India – you fight the system, you bend the rules, you swindle your customers, you sweet-talk your management, and if you’re still in trouble, you lie.

    I realize that I sound somewhat crazy writing all this – to Indians, this is part of life. You might argue that I am not a realist and I dream of Utopia where people actually respect others; they value time and resources; they are honest, courteous, punctual, and disciplined. But if we’re not teaching such ideals to kids in school (Samar – I am sorry for you), we’re clearly not steering our society in the right direction. We need to make strong statements that lying, be it in the a boardroom or in a classroom, is certainly not acceptable. If you know that everyone around you is lying, who are you to trust?

    I grew up with certain values, and one of them was the importance of morals. Honesty and courtesy, among others, are the foundations of any civil society. Ramalinga Raju clearly ignored those. Where we might never know the entire situation that since we can never be in his shoes to realize the kind of decisions he had to make, we can never absolutely judge him. However, his actions to provide for his family – bailing out Maytas, came at the expense of 53000 employees countless shareholders and billions who will suffer due to the decline in economy (and that doesn’t even the scratch the surface of fallout Satyam’s decline). While it is one’s duty to provide for one’s family, that duty does not give you the right to harm other innocent people. And it wasn’t a one-time decision, this piece of art from Ramalinga Raju must have taken months of hard work and tons of data fabrication, shushing of scores of people, and bribing of god-knows how many levels.

    He has betrayed the trust of thousands of people and that is reason enough not to feel sorry for him or to condone him. What will happen to Satyam’s employees, only time will tell, but they definitely won’t go home tonight proud to be with one of the best Indian-IT companies.

  12. Correction: Raju awaara barsaat mein, chori chori ‘dil’ de baitha…(the song continues…’na thi wo bobby, na thi wo radha, dil se dil ka sangam ho gaya’)

    The song is famous for its Tarantino like obsession in referencing as many famous films as it can in one line.

  13. “Using shareholder money to buy shares in the company your son runs at outrageously elevated prices?”

    Actually, he wasn’t attempting to buy his son’s company with shareholder money. He was trying to buy those companies with non-existent money, so that whatever non-existent cash had built up in the balance sheet can be replaced by real assets. Since no outsider will agree for such a transaction, he chose his son’s companies.

  14. Though Raju has to be blamed a lot for this, I think there’s much more to it than what is available to us in the public domain . How can not even one member of the board and other senior people have no idea about what was going on. It is possible that something more fishy happened inside , due to which Raju was forced to take the responsibility squarely onto himself acquitting the entire board .

  15. I joined satyam 4 months back.Dont even kno if there will be a paycheque at the end of this month.The biggest scam is on ppl like me.

  16. Dada i know it is not related to the topic. But yesterday Jack of all trade and master of method acting KRK (writer,producer, actor, song writer, blah,blah of the cult classic film Deshdrohi)called me. His complain was that you are doing injustice to him. You reviewd crap film like ghajini,Karzzzzzzz,dostana but you ignored his GEM(Deshdrohi). KRK knows that you are busy with your usual work now you have to write a book also. But pls don’t ignore his many years of labour. Deshdrohi is an once in a million yers film. so write a post on a masterpiece called “Deshdrohi” Otherwise KRK will label you as Deshdrohi.

  17. The final letter by Raju seemed pretty genuine.We need to remember this guy slogged his butt off for 20 years for Satyam and he would be pained equal if not more by its demise.
    I think the acquisition of Mayatas seemed like a sensible idea to start anew. If he made a hole of 7000 crores we also need to remember the amount of wealth he created.
    Let us not make a villain out of him. He was a victim of stock market’s expectation of stellar quarterly results.
    On top of that PwC will escape since it is not a registered firm in India. The auditors should have caught this scam at an early stage but they didn’t. This seems to suggest that they could be involved.
    No amount of investigation will tell us who all were involved and all the details. Might as well wait for some company to take over Satyam and save its employees.

  18. Arnab, this is vintage! I mean, I’m in office trying not to laugh loudly so that my boss hears… Btw, my boss is busy reading Ramalinga’s letter and btw, we are an audit firm. he he…

    And Shashwat Please… Why does everybody start believing a criminal once he gives a confession? Hés created Money??? And he himself mentioned that the Maytas acquisition would fill in the gaps. So you can imagine that even that acquisition was for a diff. purpose and again the figures would be cooked up in that case.

  19. [Rahul] The depth of the fraud is certainly not limited to the CEO level. While the board can feign ignorance and plead innocence, they are as guilty in the ordeal as Raju himself. How can you blame one person (although he did own up to everything) for the financial debacle of this magnitude?

    [Shashwat] I agree that Raju has made considerable contributions to India, not just by improving the economy and the industry but also by creating this world-class corporation. However, this 7000 crore fiasco should not be overlooked because of his past accomplishments. This ordeal did not happen overnight and for a person of his stature to be part of a financial oversight (for lack of a better word) that affects a mile-long list of people is not easily fathomable.

  20. @GB

    Let me tell you that this is one of the best pieces I have read in a long time on the blog. Fantastic.

    @ Shashwat

    Please spare us from your saintly views on ‘poor’ Raju. The man wrote this letter (less confessional and more suicide note like) not because after 7years he had turned over a new leaf, but because he could not pull it off any more.

    Had he managed to pull off the Maytas heist he would not have given a second thought to the small investors’ potential losses.

    Even today you do not know how much to trust. The way he is trying to shield his family and board members and taking all the blame suggests there is more to it than meets the eye.

    Management quality has been a big issue for Satyma. Raju always liked people from Andhra and he preferred them over others. This is not to say that people from Andhra are not good enough, but when you limit yourself to a small pool, quality has to suffer. Almost like in-breeding.

    The defining moment for me was in late 2002/ early 2003 (not too sure of the time).
    Venue: Top floor cafeteria at Satyam Office at CP Ramaswamy Road, Chennai (local unit of BFS group used to operate from there)

    The global head of BFS (banking, financial services) is addressing the entire team. The occasion is transition of the World Bank (yes, the infamous WB relationship) to BFS group from SAP group post a reorg in Satyam.

    Our man says, “…..Now that BFS group has World Bank, we have accounts (whose names are) starting with all letters of the alphabet except ABCD (he names three or four alphabets). My team has promised me that by the end of the year we will have accounts whose names start with all letters of the English alphabet.”

    Thunderous applause and a few dropped jaws.

    So much for strategy, vision and inspirational leadership.

    Raju ran his fraud in true Satyam style. Extremely low on competence.

  21. Guys! Raju after his honest letter has dissappeared (TOI reporting right now). Police is speculating Texas or Dubai as his destination. Guess that there was definately some real cash that was put to ‘good’ use. I pray for the Satyam employees. The recession has made jobs very dear in many fields, this are real hard times. Hopefully, the financial greats like PM Singh will come to rescue of the Satyam employees. BTW, it was mentioned in Hindu today, that a record no. mid and top management from Satyam had started putting their CVs on a renouned It jobs website, almost a month before this revelation. (it has mentioned figures to prove that).

  22. @anon at 3:49am,

    I am not defending Raju here, but going by his letter, it is clear that the attempted acquisition was his last ditch attempt to cover up the overstatement of accounts in Satyam. Yes, Maytas was overvalued, but it was overvalued to the extent of the gap that was there in Satyam books. Since Satyam didn’t have any cash anyway and it was going to acquire Maytas through imaginary cash, it doesn’t matter by how much it was overvalued. Defrauding of investors had happened earlier when he overstated the revenues and incomes for years. It didn’t happen when he tried to buy Maytas.

  23. Fine now the Satyam fraud has come out, whats gonna happen

    1) Lot of PJ’s about Satyam and Raju floating all over the Net.

    2) Lot of anguished blogs.

    3) Lot of breast beating in the Business Media about corporate ethics, transparency etc.

    4) Lot of feverish discussions on Big Fight, Big Adda or whatever on the National TV Network.

    5) Conspiracy Theories floating all around the Net.

    6) Infy, Wipro, TCS et all, claiming they are lily White, until some one spills the beans about them.

    But if a company has been able to perpetuate this fraud for 7 long years, is there not something seriously wrong with our corporate structure?

    Saying that Satyam is an isolated case, is like sidestepping the main issue.

    Cooking books is a common practice in each and every corporate having investors, i for one dont believe that Raju came clean just because of this cook book stuff.

    Raju is not the problem, there is a goddamn problem with the whole system. Yeah sure we make a villian out of him, crucify him, murder him, make snide remarks about Hyderabadis, that is till the next big scandal breaks out.

    But are we trying to look at the core issue. Something seriously wrong in the fundamentals. If all this comes out of this exercise is just the points mentioned above, then its nothing better than the circus we keep having every year, whenever terror attacks takes place.

    The Enron case made the US Govt come up with something called the Sarbany-Oaxles act, does the Indian Govt has any such thing in mind.

  24. GreatBong, just want to point out that Satyam was not buying Maytas at outrageously high prices. If you see even the analyst’s view in the linked news report, he says that the deal was outrageous. Not the price. In fact in this case the sons were doing Dad a favour by allowing him to buy their companies cheap so that Dad could hide the non-existent cash surplus by showing that it has been used in the acquisition. Anyway, thanks a trillion for the reference to ‘Raju awara barsaat mein’ — was reminded of this song after zillion years… golden memories from olden days… rushing to youtube to search for this song now… ciao

  25. Ok. Conspiracy theory- my gut feel….whatever…….. here goes.

    Raju has NOT been misling Satyam shareholders to the extent that he has confessed.Sure the books were overstated probably but a 3% operating margin cannot happen in any IT Services business, the economics is pretty straight forward and differentiation is pretty low.

    THE FRAUD IS HAPPENING NOW.

    His Maytas share transfer deal did not work out… his personal wealth was at stake… which he would have earlier provided as collateral to speculate in his own shares and buy land in the real estate venture.

    The plan that follows is simple.

    Siphon off the money.

    Say it never existed.

    Flee the country and if repatriated get tried for a lesser crime of accounting forgery.

    1.2bn $ await you in the accounts of a hilly country.

    Give or take 100-200m $ to accounts of key political players.

    As I write this I see news that Raju is absconding.

  26. I have an auditing past… so for me the biggest joke/ scam here [apart from Raju himself] is follows:
    a) How come PWC audited Satyam’s accounts for 7 years without ever getting a cash/ bank balance confirmation?
    It is normal practise for auditor to get cash/ bank balance confirmation from Bank Company for amount shown as bank balance by Client [Satyam];
    b) IF Raju was alone, how did he manage to inflate figures in the accounting system? This can’t be done by the CEO alone… people from accounts and finance have to first pass [bogus] entries in accountancy system.. which then is shown as [bogus] transfer to bank accounts… so at least a team of core finance / accounts team members knew and helped him all along.

    Frequently Anon.

  27. sab ganda hai par dhanda hai yeh..
    One Gud thing out of this will be that now Vermas, Bhatts, Guptas and other “realistic movie” maker will leave 26 nov terror attacks and work on corporate scripts…

  28. Hundreds of freshers must have joined the company after bieng placed there. Many of them would have been on bench since they joined.
    And now this.
    If layoffs happen, they won’t have the experience to apply elsewhere and the market is also down…
    Not only freshers, every employee laid off will have a tough time given the current conditions and Satyam’s current reputation.
    Bad timing.
    Someone very correctly put it on TV yesterday: “Raju tried to be a promoter first, then a scamster. He was good at neither”
    And all this talk of him absolving everyone else except him of any guilt is plain rubbish. How can a fraud of such magnitude be perpetrated without the knowledge of the auditors, the Chief Financial Officer (whose name is anyway missing from the list of the “innocents”), the company’s finance department etc.
    I thought the very reason for having an independent board of directors is that they will safegaurd the interests of the stakeholders and put a check on the promoters using the company’s cash reserves to further their own dubious intentions.
    Then what were they doing all these years? It seems having an independent board of directors is just a cosmetic exercise to to project an image to the world that good corporate governance is being practised.

  29. In absence of property rights and economic liberty, such frauds by politicians and corporates will remain a common thing. And the common people will either keep opposing and criticizing just to get ignored off, or otherwise they will keep supporting the wrong in the same sarcastic ways as mentioned.

    And one thing which should be mentioned, it is NOT about nation or nationalism. it is about the money of the shareholders.

    But then, in a nation where government itself acts as a looter and loots common people by various forms of income taxes sales taxes and corporate taxes, any honesty is just a dream. Compulsory taxation and lack of property rights economic freedom can never let the situations improve.

    About the 16 year old guys idea about the satyam issue, I know the reason behind that. Exam cheats are the heros these days Obviously all other comments from various age groups follows the same reason of the deterioration.

  30. Great Post! You have so well, exposed our Indian psyche of ‘everything goes – what’s wrong if we bribe, cheat, pad’ 🙂 Lets hope no other companies have such ‘padded’ balance sheets!

  31. OMG, I was really let down by the coverage on business channels, particularly CNBC TV 18. I am surprised they did not use the services of Rajdeep Sardesai.

    They just do not know how to handle a ‘breaking-news’ story. They are more used to press release and conference style of breaking-news. In fact they are so dumb they do not have a breaking-news graphic. They call it ‘CNBC alert’, or write ‘just in’.. ha ha ha ha! imagine.

    The correspondents don’t know how to sound hysterical. They break important news as if they are announcing that Infy results have only marginally exceeded the guidance. How boring.

    They don’t know how to be at 10 places at the same time, no enthu in presentation, their correspondents don’t even repeat the same news again – they just repeat the entire show.. this is the limit…. I almost cried out – O Queen B where art thou?

  32. That Gunda Mawali song… I remember! I remember!
    That had a rain drenched Shirodkar Main Battle Tank Mk-I in red camouflage being “wooed” by Kamal Sadanah/Kishen Kumar/whatshisname in an empty bus stand. For these sweet memories alone I shall carve your blog url into every tree in my garden every day…. which I do actually. Honest. 😛

    And Raju garu? Ho Hum! If the grapevine is to be believed the Late Ambani could learn a thing or two about Do Numbri and “influencing” from him. But what else can you expect from guys who quote like 50% lesser than the L2, throwing out three score laws and any consideration for fellow humans outta the window? I hope the 53000 folks working in Satyam get a soft landing….. including Mr Raju. For starters, he is *our* SOB and the last thing we want is a Dog and Pony show led by the professional cr@p chuckers of the Western Financial System.

    PS: BTW, I have an axe to grind with Satyam for providing the crappiest broadband internet service and thus robbing me of my Parents’ hard earned money.

  33. Just yesterday i was giving the example of the how we manipulated the diode curve in colleges to get the “beautiful” graph!… Nice to find there are ppl who think like i do.

  34. “Viewers may recall that”

    Recall what Arnab Da! We have a very short memory too, don’t we? We tend to forget everything that had happened in the near past. The Delhi blast had faded from the front page of the newspapers, the Mumbai blast have faded from the front page of the newspapers, give it some time and even this would fade from our memories 🙂

  35. My first time here..

    I couldnt stop thinking my days at the CA firm I used to work at and when we asked our boss how the figures had changed..he’d always say “Magic!”

    Nice post.. Sad day for IT industry

  36. Non Performers, freshers & bench sitters at Satyam are going to suffer big time.In general, Unemployment is increasing highly too. Education need reforms.. it should be made free. class & training videos from premium institutes should be sold like moser baer movie cds!

  37. I always knew Satyam is up to something in that Maytas deal… Maytas is “Satyam” reversed… Anyway I did never have very high opinions about this company… they make freshers sign a bond for a couple of years and then treat them worse than dogs. The end of the Raju dynasty was heralded since the days of the World Bank scam….

  38. Hey..why dont you review…one of the hottest albums…Dev D… it would be fun..reading your review… if you havent heard of it..check it out on youtube…. having the new cult song of india… emotional athyaachaar!!!!!!!!

  39. I think he is still lying. The fraud that he is talking about is a simple fraud which is not so easy to hide. I am sure the auditors could have easily detected this fraud. Mint has an interesting perspective. They say that based on what he’s said, it’s impossible that Satyam would be operating on such a low operating marging of 3%. Hence the only logical thing is that he has siphoned off the money and this whole thing is a charade.

  40. What matters in the case of Satyam is the magnitude of fraud; to what extent it affects society. How can you compare a girl wearing push-up bras to fool the guy she would like to marry and a multi-crore Rupee scamster who affects the roji-roti of thousands of people directly or indirectly? You seem to trivialize a serious issue just to sound cool. A wrong is a wrong; but one must also consider the magnitude of the wrong.

  41. Sab ke sab chor hain!

    Can the chairman of a public company pull off a heist of this magnitude – for this long – without the connivance of the directors & the audit firm? So much for their fiduciary responsibilities. Who will guard the guardians??

    Sad day for India and all Indians.

  42. Couple of points
    1. As GB points out, we all are a little crooked, maybe that is why I can’t summon up enough outrage over this incident. It is definitely not about magnitude. I am sure Mr. Raju would have started out with a little slide in the first year. I hope this is a splash of cold water to wake up the morals and honesty inside us and hope in this season of tax declaration(in India), people don’t fudge the bills, sign their own rent receipts and do our little version of evil.
    2. Next time when a guy suited in armani, pontificates in corporatespeak about bringing in corporate governance to Indian government, please don’t barf. There were a lot of these smug faces on TV when Indian government failed to stop the terrorists.
    3. I have had it with these finance guys. I am keeping all my money under the pillow.

  43. In india only those people present themself as “Holier then thou” who don’t get opportunity. I read somewhere that “Virginity is not a neccesity it is just lack of opportunity”

  44. @Mohan,

    In order to cover the widening “cash-gap”, that was created out of a fraud, Raju went on committing fraud after fraud , quarter after quarter. Buying into his son’s company Maytas at higher prices is another fraud, the scale of which may be comparable to his original. He would have continued to do so had not the institutional shareholders cried “foul” at such a blatant misdemeanour.

    If Raju got away so long with the “burden” that he “carried on his conscience” (as he writes in the letter), he never showed it publicly. On the contrary, shareholders may find enough support in their belief that Raju had used the “gap” to siphon away money on a regular basis inspite of his denial in the same letter.

  45. As Tin TIn points out, there is no burden of conscience or any such crap on the part of Raju the Employee Rapist.

    They didn’t overstate profits — Satyam really made the money.
    The reason the cash cannot be found in the system is because this [edited] flicked all of it.
    53,000 employees (who’s efforts earned the money which he stole) may not even get their January salaries, as per their MD today.
    He has sucked the company dry.
    He did the same thing with his first venture, a textile unit, where he even stole the workers PF money.

    The only reason he’s ‘confessed’ is to pretend that Satyam’s profits never existed — so that only Satyam gets screwed, while his other ventures and his personal wealth stay intact.

    Many Indian business men have this sweet habit of looting their own workers (often, that’s how they make their first fortune or two), but [edited] has taken it to a new level.

    Sympathy? Honesty? Conscience? You’ve got to be kidding!

  46. im sure the other it CEOs made it a memorable nite the day satty collapsed…

    And comments fly like anything….when the competion was asked…the expected emotion of sympathy,empathy and shock was there..wat was even more visble was the glint of glee in their eyes….a sweeeeet yesssssss echoed sumwhere…

  47. I was laughing so hard reading this piece. And it didn’t end there — I sent this link to a bunch of my friends:)) I bet their coworkers are staring @ them too 😀

  48. [poochandi]

    “I hope this is a splash of cold water to wake up the morals and honesty inside us and hope in this season of tax declaration(in India), people don’t fudge the bills, sign their own rent receipts and do our little version of evil”

    haha hahah hahahhaa hahaa… dreaming much? Every corp does manipulation or else their share prices will fall. And this scam will not put any sense into any corp.. they will still be cooking books only now they will be a bit careful. 2 yrs down the lane it will be business as usual..

  49. Finished reading the comments above… just one quick point that non-finance junta seem to be missing…

    After inflating numbers by a humongous 5000 cr, Satyam was reporting revenues / profits in line with the rest of the industry… in fact in his letter to SEBI Raju claims that without the ‘padding’ the margin was a measly 3%… the rest of the industry operates closer to 25%…

    That is, to put it mildly, ridiculous… clearly Raju was siphoning off funds into Maytas… hence the need to inflate numbers in the first place…

    Also in the letter Raju claims he never sold a single share of Satyam for non-philanthropic reasons… agreed… all he did was pledge the shares to raise loans that he didn’t bother to repay…

    Sometimes, it makes one glad, that we haven’t abolished capital punishment…

  50. too early for this post…still reeling in shock….love ur blog, thats why the criticism…there can be humour wrapped in a more indepth analysis as well…the analysis seems to have been at the periphery..

  51. Cooking up numbers, as a matter of fact, is nothing new to corporate India. Even US companies follow this method. But, this “innovative accounting” is limited to profits and margins. Never with the cash inflow. The cash flow of the company is considered the holy cow which is never tampered with. It is because of this that the case of Satyam has surprised many.

  52. Great post – true, too!
    Agree with Bengal voice & Anshul.
    May be I am a cynic- but the truth is out there.

    You sweet talk the management, you bend the rules, and if everything else fails – you lie.

    Apt lines – “There is just one crime in business. Just one.

    And that’s getting caught.” 🙂

  53. Since this post is in a lighter vein, I would like to support the spirit of this blog, namely, Rajus’ crimes are nothing new. Just as Punjabis, Coorgis, and Maratthas are known for their love for defence services, just as Bongs and Mallus are known to love communism and high literacy levels, the Andhraites are known for their own special traits. The Global Mistrust Bang’s Gelli, the thousands of software techie freshers armed with MCAs obtained through dubious means faking their CVs, are all from Andhra. So much so, that the HR depts. of most IT companies look at the resumes of even genuinely good Andhraites with a magnifying glass.

  54. @ GB

    very good post this. We Indians can swindle anything. Just Raju guy got caught.

    @ RajTilak

    thats the saddest part. Everyone forgets. Everyone’s , as Floyd would have it (though not in right context this) comfortably numb.
    Ghajini, however rubbish it was [i m thinking of starting a MEMENTO_FAN_PISSED_OFF_WITH GHAJINI club:)], its actually sign of the times. Indians are as forgetful (comfortably so), restless, going round in circles & groping in the dark as the lead man in that movie. We Indians suffer from this amnesia, & thus not far from another century of slavery. Satyam issue will grab the headline for maybe another month [just as i write this, Slumdog has won 4 Globes: here’s what Globes are::http://www.rollingstone.com/blogs/traverstake/2009/01/are-the-golden-globe-awards-th.php, so that is new thing for our media]

    btw, GB, how come you missed a movie like Oye Lucky Lucky Oye. Kind of, just fits this Satyam scam. 🙂

    Pathetic Times!

  55. Except a few corporate honchos and the victims of Satyam, Kolkata isn’t that bothered. Mamata Banerjee is there to keep our minds off all this hi-fi stuff.

    And this post of yours is a masterpiece. How about ending with a charity item number by Mallika to Satyam Shivam Sundaram? the viewers shall give money and satyam’s employees shall be bailed out 😉
    by the way, we share an almost similar blog title. in this world of plagiarism, i can proudly say that i have not lifted yours 😐

  56. I am a Pakistani netizen and I request the blog-moderator to allow me to post this following message.

    All of you know that India Uncut (http://indiauncut.com) is without doubt the best South Asian blog in terms of content, opinion and originality. Its creator Amit Varma has been recognized as one of South Asia’s leading young intellectuals and has been the go-to-guy for international media (Larry King, BBC) and India Uncut has been consistently winning the Best Indian Blog in local competitions for many years now.

    This year India Uncut has broadened its reach and scope by becoming one of the blogs to be nominated for the Bloggies, the blogworld’s premier competition, in the best Asian Blog category. It was leading in the polls for a length of time but due to rampant malpractices has been reduced to second place. Please read more about this here. (http://indiauncut.com/iublog/article/vote-for-india-uncut-in-the-weblog-awards/)

    I appeal to all readers of this blog to kindly visit http://2008.weblogawards.org/polls/best-asian-blog/ and vote for India Uncut within the next twenty four hours. More than one vote per IP address is illegal though there is nothing that prevents you from using multiple IP addresses to cast your vote for Amit.

    Please help us in making Amit victorious.

  57. Hullo Paki spemmer above:

    “All of you know that India Uncut (http://indiauncut.com) is without doubt the best South Asian blog in terms of content, opinion and originality. Its creator Amit Varma has been recognized as one of South Asia’s leading young intellectuals and has been the go-to-guy for international media (Larry King, BBC) and India Uncut has been consistently winning the Best Indian Blog in local competitions for many years now.”

    Heh. No actually he is someone who fed off Cricinfo and [edited] And he supported the Iraq war. He is a [edited] pseudo-secular, not much different from an Arundhuti Roy. [edited] He [edited] wants Kashmir to be handed over to the Pakis. No wonder that you like him!

    And FYI, he has been thrashed ignominiously by this blog for quite a while now.

    “This year India Uncut has broadened its reach and scope by becoming one of the blogs to be nominated for the Bloggies, the blogworld’s premier competition, in the best Asian Blog category. It was leading in the polls for a length of time but due to rampant malpractices has been reduced to second place. Please read more about this here. (http://indiauncut.com/iublog/article/vote-for-india-uncut-in-the-weblog-awards/)”

    The fact is that he has used the same malpractices to get a majority of votes that he has received. But then he is a past-master in calling a kettle black when he is a pot himself. He made all sorts of irresponsible accusations against Saurav Ganguly when he wrote for the Guardian. No Bengali will ever vote for him!

    So I urge all Ganguly fans to go there and vote for the leading candidate to defeat this shameless propaganda effort by this anti-national. [edited]

  58. Hi GB,

    I have two suggestions for Satyam:

    1) The company should change its name. Satyam (Truth) should now be renamed Asatyam (Lies).

    2) Asatyam Computers should relocate their HQ to Waste Bengal.

  59. @Hami Ekta Bangali
    Dude first change the name.. Hami and Bangali dont gel together.
    Second, the glint of victory or the ulterior “yesss” can soon turn to a despondent “noooo” when they see their stocks tumbling down, because at the moment the crisis the last thing you do is “so-what-i-am-safe” attitude, because the whole stock market runs on perception, just look at post Enron recession, everybody took a hit that time. Pray it is not a similar situation.

  60. @poochandi
    I just love your plethora of new year resolutions.
    But just some amount of reality check…
    1. Harshad Mehta scam was lot bigger in magnitude than this, if the morals of our fellowmen had been so malleable that time, it is same even now and will continue in future. Just look at our Amar Singhs and others.
    2. Self-signing rent bills ; now thats a classic tale. I think that the problem lies more with not giving receipts after taking the rent than signing you own rent bills for getting HRA’s from office.
    3. Corpo governance, I believe is for better running of businesses in PSUs and other areas of public super-efficiencies. I dont get the connection between that and 26/11. I think there are institutions like RAWs and CBIs of the world who do this job. God forbid the day when Tata rata-tats his way to victory.

  61. @Anon-just-above,
    1. It might sound a bit naive but my point(I think, GB’s too) is our voices will be a lot harsher and lot truer, if we practice what we expect out of our leaders/CEOs.
    2. No, I disagree. The problem is, some people forge rent receipts. That is where the problem lies, not the house owners not giving rent receipts. That is not an excuse to cheat. Why not forgo, instead of duping?
    3. Ok, you have a point there. I should disconnect corpo governance as a concept and the people who doesn’t necessarily practice them, which includes some of the management of private companies.

  62. To Bengal Voice
    Guru Apnader enthu ache, apnara chalia jan,jodi kichu korte paren waste bengaler jonno.

    In English:Boss , you hot enthusiasm , please go on, if you can do some thing for Waste Bengal.

    Arnab; A good post, don’t worry there are many names which are there one of the them is Vivek Paul.
    But I think the worst part is with PWC , when I was in South Point School, Calcutta , many of our seniors who were the best and brightest commerce students studying B Com in St Xavier’s, Calcutta ,and do audit is PWC , they were very highly rated audit firm and good quality C.A.s used to come out, but now you can’t trust them and the ICAI is raising questions about the credibility of PWC.

    It’s true that Raju was cooking his books of Accounts for last seven years, so why an audit firm like PWC can’t come forward and disclosed it, the question also lies with ICAI
    Why it’s pointing it’s fingers to PWC now, what they were doing.

    From this episode its true that Indian Family run business can never be professionals there is a touch of feudalistic touch in them , I am sure there are many other Indian corporate who are cooking their books of accounts and doing intra day trading and over invoicing and under invoicing their accounts and making money.

    BSE and NSE are mere machinery by which some people are making fast bucks including the FII’s Recently Forbes has said Anil Ambani has lost US$30Bn in ADAG market capitalization.

    Great Day.

  63. In India, Satya can never win, and Satyam scandal can never be punished.

    In a free-market system, bad companies dies, good companies evolves, that is the justice. Corrupt should be punished.

    But in India, to save one corrupt man/corporation, every individual honest tax paying citizen will be punished.

    Now government is planning to Bail out Satyam.

    Doesn’t it shows enough that the government and the corporate in the Indian oligarchic mixed economy system are all in same colors?

    Why should we be punished?

    When Mr Raju has accepted that he was Manipulating the balance sheets, and the Inc is not in so huge profits which is being show-cased upon to bait banks for loans and investors for shares, Why will a SANE person invest in Satyam?
    But alas!, we have given our hard earned money in the hands of the LOOTER government, which will now safeguard the corrupt the scoundrel.

    Isn’t it the same which Mr Raju was wishing for? he had no cash yet on papers there was huge cash. To manipulate things, he tried to show-off buyout of Mayta’s. Now when he has accepted it, he has no worries to think about. Government will throw the tax payers money in the dark hole of Satyam, and will punish citizens for the corruption of a corporation.
    What for? For saving some jobs? Nah!
    Jobs are not in danger, government will bail out to keep some space for further scam and embezzlement of Tax payers money.

    Why should not let the Satyam Inc and other property of Mr. Raju be bankrupted and the money collected thus should be used to payback the bank loans and money of shareholders being embezzled in the process of Satyam Fraud. The new buyers of Satyam will take care of the workers of Satyam, and even if some workers loose their jobs, it would be much better than punishing whole India for the crime of one corporate by bailing it out.
    As it is highly improbable that Indian government will support free-market process and will support bailout because it provides enough space to further embezzle tax-payers money.
    Thus, again Satyam fiasco is taking the shape of crime of government interventionism, collectivism forcing the crime of some to all other individuals.

    But alas!, Indians love to be exploited as they hate freedom.

  64. Pingback: Long time no see? « Myriad Shades

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