Friday, January 09, 2009
satyam in sanskrit means truth. asatyam is the opposite.lies.that's what the IT firm satyam's ramalinga raju did. cook the books. he must be a superchef. about 1.4 billion US$ of inflated profits over the years in the balance sheet.and he continued to get corporate governance awards.till he cooked his own goose. the last straw was when he tried to invest about 1.3 billion$ from his nonexistent reserves into his son's companies bearing the name maytas(satyam spelt backwards). shareholders raised a hue and cry and the plan had to be shelved.and they wanted his head.so he wrote a confessional letter and put in his papers.before that many of the non-exec directors,members of the supine board,had also resigned.a tsunami has hit the the indian IT world. and its image has taken a big beating.
everyone is in damage control mode. goverment,sebi,employees. what will happen to the company is anybody's guess.the share price plumetted from about 180rs to 20 rs or so.surely will hit zero soon.the company's net worth has been completely wiped out.'class action' suits are being filed.raju could face 20 years in prison.people from his village still revere him like god though.they feel he will rise like phoenix from the ashes.
he is likely to declare himself insolvent.then no legal action can be taken against him. he will be as good as dead. a sad end to a meteoric rise.from a ohio state university educated mba to an IT czar and now living on borrowed time. i spent a few days with him when we were together in a senior management course at hyderabad about 15 years ago.i found him to be sincere,hardworking,friendly and a man with a vision. there is a saying in sanskrit."vinaasha kale,vipareetha buddhi".when you are destined to be destroyed,you will do all the wrong things. raju digressed from IT after he became successful. diverted the company's funds into real estate. he is supposed to be owning about 6000 acres of land. greed knows no limits.
what will happen to satyam whose value is zero now? maybe it will be cut into pieces and the profitable businesses taken out and sold.the stigma is so much that infosys has openly said that it will not touch satyam with a barge pole. maybe a daring PE firm would venture into it. a sad moment for india which prides on its IT achievements. this is the 'mother of scams'.