It was 7th January 2009 morning… Sitting at my office cubicle and working on a task… Got a ping from Krishna… When I read that message, it was a shock for me… “Satyam’s Raju resigns, admits fraud ” was the message penned in that… Just to know more about it, jumped into the web and read that it has turned out to be a scandal of about 7000 Crore… It was the hot news already all over the web…
Raju, in his letter has confessed that he has inflated the earnings and assets of Satyam Computer Services Limited for years. He admitted the fraud of manipulating the balance sheet numbers and cooking up the fake profit figures in the balance sheet. In order to fill up the gap between the balance sheet and the actual figures, he has continued this fraud for years. The gap never got filled up, but widened further. He quoted this in his letter as “It was like riding a tiger, not knowing how to get off without being eaten” But he has ridden the tiger too long that he died without having the food to survive. And more than that, the cost he paid for this ride is his empire that he built for more than 2 decades and future of its employees.
Satyam, now being dubbed as India’s Enron battered the confidence of the investors, clients and its own employees. It not only shattered down its prestigious reputation in the world of business, but also darkened the image of the Corporate India across the globe. It would threaten the future foreign investments into Asia’s 3rd largest economy. This is going to get added up to the existing woo of Global Economic slowdown.
This is not a scandal that is going to affect the IT industry alone. Its effect is rippling to even the common man. It is going to decide the fate of 50,000 odd employees of Satyam. It came as dawn to Satyam share holders with its share price falling down 40 from 170 in a single day. Today it even reached all time low of 6.5, currently trading at 21. This scandal is not going to leave off the students too. The colleges students who have their dream offer of Satyam in hand are now in fear of losing their dreams shatter away.
Another shocking issue to look out here is… How profits could have been inflated for several years to a size of resulting into such a big scandal without the knowledge of board of directors?? This scandal is surely going to roll the heads of many high heads and audits. What the Corporate Governance of India was doing for such a long time. Has the time come to redefine our Corporate Governance policies???
Being an Ex-Satyamite, associated with the company for more than a couple of years, I feel a bit more than usual. Really I couldn’t believe that Satyam was being run in such an unethical style. When I was in Satyam, I have heard of Raju as one of the more ethical CEO. I have never felt bad about the company so far. Even now my conscience makes me to feel bad about the person Raju, but not the company.
Raju and his team have rewritten the meaning of the word Satyam, which means “The Truth” in Tamil and Sankrit. Lastly, I could not stop wondering of the fact that this is the company that won Golden Peacock Global Award for Excellence in Corporate Governance twice, one in 2002 and other in 2008 three months back.