Wednesday, January 7, 2009

Satyam Fiasco - Few Questions

The multicrore fraud of Satyam of cooking books, forgery and inflating profit raised a number of questions in my mind. I just thought it was a one off affair and the industry on the whole was in a good shape. But after talking with lot of my friends, I am becoming doubtful on this. 

1. Is Satyam alone in this? My friends argue that this happens in every company which I couldnt accept. Churumuri  has put up a poll with this question and most people concurred with my opinion that Satyam is a one off case. And ofcourse Nasscom, the torch bearer for Indian IT has to say this. Hope it takes steps that things like this wont happen again. Just imagine if one person can hide this for these many years with not even one audit finding any fault speaks of the magnitude of things that ran behind to cover this up. 

2. This is an ethical question: Is Ramalinga Raju a hero? People are lauding him saying he is a hero,  for bring IT to AP, growing Satyam into the organization it is currently, the social service he does etc and funnily even for the fact that he had the guts to accept his wrongdoings. How silly.. He should have had the guts to do that the first time he got to know of the accounting fraud. But thinking in a different way,  is this the way business works? If that is the case then Raju becomes a thief only because he is caught? I think we can know the answers for these questions soon if the new regulations passed will surely bring it out. 
Regarding Raju, I dont think he has done anything laudable, just because you became the face of IT industry in AP,  and the face of social service (EMRI, Byrraju Foundation) doesnt mean he can get away with massive misdoings.  He has cheated the investors who have put their hard earned money. This lack of trust is one thing which makes him a fool, a fraud and a crook and it virtually cleans all the good name or good intentions if any. 

I am just hoping sincerely that all the companies accounting is not similar to Satyam and the whole regulation and auditing is not just a farce. 

Just wishing that the Satyam story will end in good merger with employees, clients and shareholders come out with minimum loss. 


  1. 1) It not possible for a single person to distort facts to such proportions... He sure is the big fish, but I am sure many ppl knew and took part in this.

    2) I dont think getting to a 'profitable' end at the expense of some morality is the right approach. If you could screw one person and help 3 others, would you do it? I wouldn't. There should be better ways of doing things.

    Do all the companies indulge in malpractices? My honest answer, for all my optimism, is yes. Maybe not at huge proportions, but there will be instances where the people may withhold/hide data, if not distort it. Moral ethics are never hard-lined, I wish they were!

  2. Yes Ketan,
    I am sure that every one does something or the other which is not perfectly ethical, but I would draw the line when it affects any other person.
    It seems like it is a fallacious argument because when we are ethically wrong in an organizational sense, we are not harming any person ethically but on the whole there will be an effect somewhere. Raju might have thought 'I am not cheating anybody' for whatever he has done, increased the share value, paid the salaries and bills initially, but in the end it did have an effect.
    So it means we cannot afford to be unethical any time but it is so hard to avoid it that we end up doing something sometime but intuitively we will always know how much effect it can have and hence we should not delay correcting it.