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• January 22, 2009

  Surajit Debnath wrote

  SATYAM SCAM – TIME TO FACE FACTS
  Satyam scam is not something that will shatter the peace and tranquility of Indian public beyond repair. The robbery may be big in terms of western standards but for us its just another brick in the wall- the wall of resilience and apathy. Both these conditions are thrust upon us as prerequisite for being a patriotic Indian.How else do you explain Police promptly swinging into action and arresting that investor at Hyderabad demanding an explanation of the scam from Satyam’s Board Members? Just sample the cheek of our Administration !! Criminals who have swindled billions of Rupees and proudly proclaimed the same to the world at large, are not even considered worthy to be detained for questioning by the Police at that point in time. But the investor whose hard earned money has been swindled by these criminals,is rounded up by the Police for showing disrespect to them outside their den. As a true Indian he was expected to show resilience and lick his wounds in the shattered corner of his hearth. How dare he!!!And he also deserves the wrath and ire of public. Experts in various TV channels were totally apathetic to the plight of the investor. They questioned the very motive of the investor entering into a risky trade…you blighter of an investor…you wanted to make a quick buck…now you pay for your sins…words to that effect. So what if just 24 hours back the same channels were blaring away to high heavens that Satyam shares must be accumulated at all cost at current levels (Rs 170/180) as medium/long term investment. And Mr Expert, you also advised all and sundry to fill one’s gunny bags with Satyam shares in case it plunges to level of Rs 110. Apathy, apathy. That’s true Indian colours.In any catastrophe there is apathy from public not affected by the tragedy. Just another brick in the wall of resilience and apathy.
  We are being consoled that Satyam scam is just a one off case…an exception to the otherwise honest and trustworthy system of governance of Indian companies with myriads of foolproof checks and balances. Believe all these official statements at your own peril. Otherwise seek answers to the following shortcomings :-
  (a) After someone admits to a financial crime of horrendous proportion in public,does any nation accept its law-keepers to take more than 72 hours to even talk to the perpetrator, and that too after the fraudster himself walks into Police Headquarters to surrender. Under these circumstances what is left to say for our legally romantic words like Suo moto and Prima facie. Who will explain as to how the entire executive and the judiciary system of this Shining Nation got paralysed till the perpetrator of the crime got tired and said enough is enough- let me now cool my heels in police protection before some desperado acts irrationally against me. It is now believed that the Law-Loving-Raju did a Charles Sobhraj act in order to escape the long hands of the firm and draconian Law of United States of America which could put him away for 25 years for cheating its citizens. He therefore directed Indian administration to stop squabbling over who-will-bell-the-cat and initiate legal proceedings against him. In this fashion the US Law-Keepers will have to wait for the proceedings to be over in India before they can get hold of his neck, which by conservative estimate should not be before 15 years. Here on home ground Mr R Raju can enjoy the luxury of being on bail and rub shoulders with the rich and famous, which correctly interpreted means Indian Politicians. Are we so blind as to not see the power of money calling all the shots. If that is the case then take your call to the assurance that its a one off case.
  (b) Why did Raju ostensibly come clean while submitting his resignation? Did anyone ask him any discomforting questions? Not a single eyebrow was raised on the economic viability and vibrancy of Satyam before he sang. Even the Goliaths of the Financial World were rudely taken by surprise prompting them to jettison shares of Satyam from their Portfolios at fire-sale prices. The question that still begs an answer is this – what propelled Raju to tell the world that look here I am, a fraud. The extent of my fraud is Rs 70 billions and now come and catch me if you can. Something is amiss- something escapes logic. If we take his initial statement to be true that books were inflated then to find that out after his resignation would have been extremely difficult considering Board members like Mr Ram Mynampati could not even smell it even after being in the company for a decade- what a nincompoop!! How could a fresher in the Board even dream of cooked books when there is a seal of guaranteed correctness from an international audit firm, PwC. Then why did Raju do a kamikaze on Indian Economy in general and India Inc in particular? And if what he now supposedly confesses that books were not inflated but money was siphoned into land deals is true, then why didn’t he correct the situation before he resigned. I guess putting money back into the company would any day be a better option, than be crucified as a cheat and a criminal, for a man who commanded such high respect as a globally recognised Indian celebrity entrepreneur and a demigod for many Indians, especially Andhrites. Then why did he not take the logical path. Does he also have a handler? Like it or not, this is another terrorist attack on the Indian Economy like the 26/11 Mumbai attack. We can pooh-pooh it as a conspiracy theorists’ bad imagination, but the circumstances demand that we investigate the possibility of confession at a gunpoint. And this theory will pass the Litmus Test the day another Behemoth of Indian Industry sinks without a trace, euphemistically speaking.This has to happen in immediate future in a bizarre manner since many companies have plenty of skeletons in their cupboards which can act both as catalyst and ammunition for a conflagration in any giant corporate house – a la Satyam. What happens then to faith in India Inc and its checks and balances. We as Indians cannot afford to let Satyam drift away into oblivion.
  So before lightening strikes again we have to strengthen our house to ward it off. We cannot afford to let Satyam be quoted in history as a failed company. As things unfold,the unshaken belief of investors and stake holders of Satyam in Satyam will be vindicated. The company never failed- there has been a robbery in the company. Some robbers have been nabbed and rest of the accomplices will also be ferreted out by the investigators. But what surprises most is the fact that Govt is juggling with the idea of a bail out package to revive Satyam. For crying out loud, why isn’t the Govt simply confiscating the cache of loot from the Robber-in Chief and restoring it back to Satyam. The first reaction to the public announcement of acceptance of fraud by Raju should have prompted the Indian administration to freeze all bank accounts and confiscate all assets of Raju and his family members,even before initiating any investigative proceedings. That would have been the proper impartial approach of any nation, except Banana Republics. After all someone is crying hoarse that he has committed mayhem like murders and our administration is found questioning the veracity of the confession of the killer!!!
  Throwing red herrings like the confession letter is not signed by Raju!!! Shouldn’t such officials be also taken for interrogation for complicity in the crime. It would have happened just like that in any other civilised part of the world- but not here in India. No one questioned the self confessed villain and he was not disturbed for more than 72 hours. The authorities had various kinds of doubts…to dispel them at least get hold of the supremo for questioning. Oh what absolute power does this self confessed criminal enjoy!!! That brings us again to the fact that even after clear confession, many a times we have expressed our inability to nail him. Think of what would have happened if he had not squealed. Generations would have passed away singing praises for Raju and Satyam. At least some Raju temples would have sprung up in Andhra Pradesh, if they do not exist already.
  Now can we fathom the extent of damage that India is doing by not acting in accordance with accepted norms? The global investor is gauging India and its ability to contain such individual acts of looting and daylight robbery. After all to make it a one off case there should be elaborate exhibition of swift and exemplary punitive action coupled with financial resuscitation programme for the company . Even now its not too late to show the world our sense of purpose to deliver justice and restore the stolen booty to its rightful owner,ie Satyam. In case we are unable to deliver properly on this issue of Satyam , then rest assured there will be many more Satyams that we have to deal with. And do you for even a second believe that we can ever restore faith of the global investor in Brand India? This branding exercise has taken painstaking 15 years or so, all to be blown away by our inaction. Can you not see the domino effect it will have on our industry, starting with IT industry?
  You need no crystal ball gazing to arrive at the conclusion. Indian economy is at a threshold of either leapfrogging ten years ahead or retracing ten years backwards, after the global economic slow down cycle gets completed. Lets acknowledge that we are witnessing a Watershed Moment in the history of Indian Economy. Let us all pray that we play our cards properly, starting with Satyam.

  A quick comment on SEBI- rather its a point for us to ponder upon.Why do we need SEBI? It is helpless in preventing crimes targetted at investors in the market. AFTER IT COMES TO KNOW OF A CRIME, IT STILL SITS ON ITS HAUNCHES TOTALLY PARALYSED, INSTEAD OF SAFEGUARDING THE INTEREST OF THE INVESTORS.Who is SEBI actually meant for? At the end of it,if investors have to fend for themselves in terms of own safety, then why have the facade of a regulator. Did it safeguard the interest of the investor by freezing trade in Satyam scrip after receiving Raju’s letter of resignation? Such a catastrophic letter and you still feel like putting it up in public domain without freezing trade in the scrip. All this after SEBI itself commented that it doubts the veracity of the contents of the letter as also the genuineness of the letter. If SEBI felt initially that the letter being unsigned may be a prank , then why did it allow the letter to become public. SEBI is harping about Insider Trading in Satyam…well some investigating team should look for such clues in the corridors of SEBI to begin with.