B. Ramalinga Raju, take a bow.
Fooling 53,000 employees to the billion in the public and the 185 Fortune 500 companies in your customer list, you, a lover of science fiction works by the big Three-Clarke, Asimov and Heinlein, will now be remembered for having surpassed them for having written the fictitious books of your then-company, Satyam Computer Services Ltd. One of the pillars of the IT boom and the real “India Shining” has fallen.
Yes, we know how he has fallen from grace in the eyes of Corporate India, the small shareholder and sadly, the youth of this country which was starting to believe that it was worth living in this country and working towards a greater tomorrow. Anyone who cannot relate to why we are making a fuss, it’s because it’s almost as big as Azharuddin being part of the entire Match fixing scandal.
I guess now that you realize the magnitude of the situation, we can move on.
It used to be said that Hyderabad had two major landmarks: the Charminar and Ramalinga Raju, who created the company, Satyam Computer Services. Satyam means truth, but Raju, who resigned as Chairman on Wednesday, owned up to creating a tissue of lies.
Ramalinga Raju belongs to a family of farmers from Bhimavaram near the Andhra Pradesh city of Vijayawada. His father, Satyanaryana, helped create the family fortune in a small way, by shifting in the early 1960’s to Hyderabad and starting a textile business even as he bought more land for farming. Ramalinga Raju has, in the past, said that it was his father who inspired him to start Satyam.
Well, guessing by the high degree of corporate malpractices the company has been involved in, other than the start, nothing seems to be inspired from his father’s strong, yet rock solid morally textile business. Fast gaining infamy as “India’s Enron” and a severe blow to the IT industry with the fourth largest service provider going out of business, it really isn’t what a recession thronged economy of today needs.
Ramalinga Raju chose to enter the relatively new business of providing software services to international customers from India. Satyam, launched in 1987, started offering such services initially onsite to tractor maker John Deere and Co. In 1991, the company raised money through a share sale and listed on the Bombay Stock Exchange. It was also part of the Big IT and Software Sector boom, which made it, till recently a part of the BSE Sensex, Nifty Fifty and the NYSE-all signs of a steady and stable company of the future.
The woe-filled story of Satyam doesn’t have a start. From the company share plummeting to cash being created in the air due to forged bank accounts and statements; from fooling the shareholders for years by inflating profits to create a false sense of growth to the malpractice of dubious transfers between Satyam and its palindromic-son-owned Maytas. And yes, Rs. 5040 crores created in thin air- now that’s a first!
The real deal is yet to come out, with it being impossible of just one man being part of a long scam. The Directors, Chief Financial Officer and the company itself will face the music and is doing the same as I write this. Long civil lawsuits, embargo from its service providers, huge losses in jobs and stringent and fast slashing down of the company by the SEBI and other stock market regulatory authorities will follow. Those are just the tangible facts of this entire mess.
More importantly and harrowingly, this sounds another death knoll to the already rising “brain drain”, which characterizes our labour market. It makes us lose hope when one of the icons of the industry crashes and burns. The tacit admission and dishonour makes the industry reek with guilt as well as incompetence in detecting such a fraud.
Calling them the bad apple in the bunch and a “one-off incident” is true, yet oversimplifying the entire act. The youth has lost confidence and more immediately—Jobs.
Immediate remedies and swift “execution” of the perpetrators and no loss of money and more importantly, restoration of belief in the common man are needs of this hour.
The Apollo at Delphi says, “To rule the world, know thyself”
We would do good to implement this.
To a brighter dawn!