The articles of Satyam Chairman’s fraud came very late and after the stock market reacted by beating down the stock. The stock is at record bottom and probably based on the current facts, the valuations are quite higher. The company’s future, one of the pillars of Indian IT industry, won numerous awards and have more than 50,000 employees, is a question mark. There are so many people invested their hard earned money build their retirement corpus. Not only the investors lost the peace of mind, every Indian corporate, every Indian who wants India to shine lost their peace of mind.
Raju was too modest in his letter to regulators and trying to take full “credit” for everything that has happened. But, I am sorry to say that his words are too modest to believe. How come board was blind, how come the “so called” executives were blind. Were they simple “accommodated” this fraud? Whatever it may be, everything should have started at a micro level. Like many drops make ocean, all the micro frauds has undergone a fusion and finally exploded as Fraud Fusion. The investors are totally blind folded and so far they have been forced to see false valuation. (There were footages in News channel where a senior citizen shared his opinion.) It is disheartening to see such scams and the after effects. It is very bad mark on Indian companies. So far, many thought the politicians are corrupt but now this fraud has given as one more lesson. There is no difference between politicians and business leaders. Both are same as they are human beings. Greed can be devastating.
Secondly, many Indian news channels (quite often sucks) have become proactive. They are proactively reactive. They start to ask questions such as “Will it affect Indian IT?”, “Will it affect FII investments?”, “Will it affect the numbers?”. I happen to listen to Dr Narayana Murthy and he rightly pointed out that we need to make our system more transparent and teach business ethics. There are two perspectives to look – Intruder and Affected Side. From intruder side, it is the Indian IT company which did the fraud and it is up to India to fix it. Fixing it may be helping Satyam’s clients to run their business by delivering projects, taking care of investors, taking good care of employees and restoring the confidence among the entire business community of the worlds including Citi, GE and Ford. Every Indian and every Indian IT company must take this to their heart and create “Integrity as their DNA”. When many institutions/companies promote Integrity and Ethics, it becomes DNA of every professional. Looking from the view of the affected party, it is quite reasonable for someone to react as they have lost their peace of mind. So, they will react however they will continue to do business with Indian companies provided they see solid and definite action from India. The response should be from peers of Satyam, management and employees of Satyam and of course Indian government.
Thirdly, the regulators, the policy makers, the associations and independent bodies must work on making the system better. The primary focus should be on repairing the system rather than speaking, speaking like a person suffering from oral diarrhea. For God sake, let us focus on much broader issue rather than localizing the issue. The secondary focus should be to bring out the truth, at least now. Let the trials start, continue and end within definite dates.
On a whole, this is a black day for corporate governance. But this is opportunity to learn hard way. But the tuition fee is quite high.
Raju was too modest in his letter to regulators and trying to take full “credit” for everything that has happened. But, I am sorry to say that his words are too modest to believe. How come board was blind, how come the “so called” executives were blind. Were they simple “accommodated” this fraud? Whatever it may be, everything should have started at a micro level. Like many drops make ocean, all the micro frauds has undergone a fusion and finally exploded as Fraud Fusion. The investors are totally blind folded and so far they have been forced to see false valuation. (There were footages in News channel where a senior citizen shared his opinion.) It is disheartening to see such scams and the after effects. It is very bad mark on Indian companies. So far, many thought the politicians are corrupt but now this fraud has given as one more lesson. There is no difference between politicians and business leaders. Both are same as they are human beings. Greed can be devastating.
Secondly, many Indian news channels (quite often sucks) have become proactive. They are proactively reactive. They start to ask questions such as “Will it affect Indian IT?”, “Will it affect FII investments?”, “Will it affect the numbers?”. I happen to listen to Dr Narayana Murthy and he rightly pointed out that we need to make our system more transparent and teach business ethics. There are two perspectives to look – Intruder and Affected Side. From intruder side, it is the Indian IT company which did the fraud and it is up to India to fix it. Fixing it may be helping Satyam’s clients to run their business by delivering projects, taking care of investors, taking good care of employees and restoring the confidence among the entire business community of the worlds including Citi, GE and Ford. Every Indian and every Indian IT company must take this to their heart and create “Integrity as their DNA”. When many institutions/companies promote Integrity and Ethics, it becomes DNA of every professional. Looking from the view of the affected party, it is quite reasonable for someone to react as they have lost their peace of mind. So, they will react however they will continue to do business with Indian companies provided they see solid and definite action from India. The response should be from peers of Satyam, management and employees of Satyam and of course Indian government.
Thirdly, the regulators, the policy makers, the associations and independent bodies must work on making the system better. The primary focus should be on repairing the system rather than speaking, speaking like a person suffering from oral diarrhea. For God sake, let us focus on much broader issue rather than localizing the issue. The secondary focus should be to bring out the truth, at least now. Let the trials start, continue and end within definite dates.
On a whole, this is a black day for corporate governance. But this is opportunity to learn hard way. But the tuition fee is quite high.
2 comments:
Lakshmi,
I agree with most of your views.But,I'm wondering why Raju alone should be made accountable. What about the board that had eminent people who were from Harvard, ISB etc?.
I must say it is really unfortunate for Satyam to be EXPOSED.An Auditor who does audit work for several biggies told me this 7 years back." Do you think companies are really making such profits?.It is all COOKED. It is to keep the customers, Investors happy and a bid to increase the value of their shares". I remembered this conversation when I saw Raju's mail.
I would be more interested in the support that Corporate India offers to the Associates of Satyam. I would like someone to question the way the biggies strike the deal ( ethics, modus operandi....)
I quite agree with you. The chairman or CEO in an individual and it is the responsibility of the board to govern the company. There were few directors signed off but I feel it was too late to resign.
I have feeling that the fraud of this nature (sustained, prolonged and massive) cannot take place without few involved.
Even if we commit a small mistake, our conscience will kill us. But if one commits a crime as gang, it is quite natural to be passive as the responsibility lies with everyone. People may think that "It is also due to others". Though I m not good in accounting, I could hear from Media that the major fault is with auditors and board (which comprises of individual).
Now, a snake is out of bush. Let us hope it is isolated and no further snakes are there.
May be this might be an important lesson to be learned and to have high values. People who already have high values and advocate those will be proactive and not react in a situation like this.
Let us also hope that we, as individuals, professionals and corporates (???) constantly validate and elevate our core values.
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