Satyam Fiasco

   It is shocking and utterly disgraceful to learn about the fiasco at Satyam.  During the past few months, quite a few cases of corporate frauds /companies collapsing like nine pins, especially in the financial domain, throughout the world has come to notice.  Coming back to Satyam, the email, which is said to be from Mr Raju reveals quite a few astonishing things.  It is hard to believe that an amount of more than Rs. 5000 crores was non-existent.  It is not known as to how their accounts were certified by the Auditors concerned.  

  

 Now that the fiasco has come into the open,  everybody is baying for Mr. Raju's blood.  One of the newspapers had in its editorial said that the Government should try to rescue Satyam.  Seeking Bail-out from the Government has become the order of the day for the past few months. One of the quotes which really impressed me was the one about capitalism, which was heard during the peak of the financial crisis in the US.  When Wall street was begging the US Government to bail them out, it was quoted by someone, i don't remember who, that capitalism is nothing but "Profits are privatized and losses are socialized".

Coming back to the editorial that the Indian Government should try to bail out Satyam,  I totally disagree with it.  Being a Government Employee, I often get irritated the way this paper trivialises the Government Employees especially calling them babus.  This is the very same newspaper, which ridicules the Government quite often, especially the so called babus and tells the world that they are totally inefficient, ineffective, so on and so forth.   Now to hear from the very same paper that the Government should bail out Satyam, is indeed poetic justice.  Apart from ridiculing the Government, this paper goes on to lavish praises on the corporate sector, saying that the corporate sector is capable of just handling anything; that they require no rules or regulations; that they are capable of being self-regulated; that Government should keep away from such things as it was incapable to handle such things.  Thanks to the fantastic self-regulation, trillions of dollars have simply vanished into thin air.  Had it been the Government, I think the situation would have been far better.  

The events unfolding in the last few days have clearly demonstrated one thing.  Nobody is perfect in this world and everything needs to be regulated properly.  It is just not acceptable that people keep on swindling money and the Government should come and bail them out.  The people who commit such frauds should be taken to task and put behind bars.

Coming to the question of regulation, it is deplorable to think that a reputed Auditing company (based on reports in the media) was not able to detect such a fraud being perpetuated for years together.  How come the amount of more than Rs. 5000 crores, said to be the cash balances, simply be not available in the banks.  Do they not check the bank balances etc.  Come on guys, they are fooling around with the gullible public.   Had it been done by any Government department, the media would have come down heavily on it.  Shame on such people.

Ultimately, it is the hapless small investors, who lose out in the entire episode.  Most of the small investors base their investment decisions on the numerous brokerage reports that are dished out regularly.  It is surprising to know that none of them had a wind of this mega fraud.

One more report I read was how due to greed such a fraud was committed.  It is quite detailed and it appeared to reveal the modus operandi of the fraudster.  As per the report, due to greed in land transactions, such a messy situation came to arise.  Where were these people, when everybody was gung-ho about Satyam.

Today was another shocker.  During the press conference held by Satyam, one of the reporters asked the interim CEO whether the total employees of Satyam was indeed around 53000!  He revealed that when part of the Audited report was stated to be totally false, it was difficult to believe everything that was reported.  It is so cynical.

Now atleast, please dont ridicule the babus.  Keep your house in order and then throw stones at others.