No, this article is not about one of the most popular and iconic series created till date, The X-Files. This is about Satyam Computer Services which probably till last week or at least till last month, was one of the top 4 IT Companies in India. I chose this title since the media has used up all possible combinations like "there is not truth in Satyam", "no sathya in Satyam", "Satyam lies" etc. etc.
This is clearly one of the biggest scams to have hit the Indian economy and may make the work of The Big Bull Harshad Mehta pale in comparison.
I am not an investor in that company and so in some sense, I am insulated from the crash of the price of the shares of that company. But I shudder to think about those people who would have bought shares in Nov-Dec of '08 when the price was in the Rs.170-Rs.200 range, because that share is presently worth only 10% of that amount (I am not giving accurate numbers, but am not shooting in the dark either).
And it is not just the individual investors, but also institutional investors like LIC. LIC is the Life Insurance behemoth of India and if it is indeed affected by this crisis, I dread to think about the millions of policy holders who have taken a Policy with them? They've always enjoyed a Quasi-Government like status and the perception in the common man's mind is that taking a Policy with LIC is safer than with the other private players. But would they continue to have that advantage?
Check any of these search results to read about LIC and Satyam.
Then the employees. I am sure that quite a good percentage of employees would have stock options or would have been next in line to get some. So what happens to all those people? Look at the kind of money that they have lost out. And the more important worry for all employees is whether they are going to get their next monthly salary or not. Which in turn is going to impact the EMI they have for their home. If you are in a situation where your next salary is not sure, would you be willing to stick around? And if the employee carrying out his job is not doing it with a stable frame of mind, would his work be good enough?
And if it is not, would the clients who are paying for this work, still continue to extend their support to the company? And if the clients pull the plugs on their key projects, would the company be able to sustain any positive momentum? Remember, the economy across the globe is in a bad shape and the probability of a Western World client saying "Thanks. Bye" is very high.
Everyone agrees and acknowledges that the balance sheet of many a company - in all industries and fields - is always cooked up to paint a rosy picture. But the extent to which the numbers have been cooked up and that too for such a long period of time, has literally left all and sundry shocked beyond comprehension. And since the scam has shown up in the country's main industry of growth in the last decade or two, the impact has been higher. All companies in the IT industry are now going to be under the radar of suspicion.
While Ramalinga Raju may be the main culprit behind this fraud, I don't think the auditors PWC, some of the Board of Directors and even some of the senior management in the company can really escape the dragnet. Aiding and abetting a crime is as bad as, if not worse than, committing the crime. And if such senior folks in the company can claim ignorance, I am sorry to say, that response can at best only elicit a chuckle.
I also suspect that all the concerned authorities would have received adequate compensation to ensure that Raju comes out on bail soon enough. Furthermore, I am sure there are enough loopholes in our laws that will ensure that his conviction would be pronounced by the Supreme Court, after many appeals, only after 10 years. And by that time, he would have been deemed to have served the necessary punishment and let free. He would have also escaped any extradition to the USA where too many cases have now been foisted on him.
I only hope something good comes out of this fiasco and wish that the employees of Satyam do not lose their careers and lives due to the greed of an individual.
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