The Satyam Fiasco

The image of Corporate India has been tainted with the Rs. 7000 Crore fraud by the Raju family. The news about this incident spread like wild fire and soon Google was flooded with search strings which included all possible combinations of Satyam, Raju, Fraud etc. My dad was very much worried hearing about the news as he could not recall which IT firm had hired me for summers. An offer letter from Satyam which would have been celebrated only 2 months back would now transform into a worthless piece of paper. Fortunately I was lucky and my mother reassured my father that its not Satyam. The Satyam recruits who till few days back were crying about the delay in the date of joining are now feeling lucky to have avoided the association with the tainted firm. Now they can apply else where, a scenario which also is not very promising keeping the global slowdown in mind.

Well talking about the origin of this crisis, it dates back to the year 1999-00, when Satyam acquired a firm named Indiaworld. This acquisition was done just before the dot com bubble burst and Satyam suffered huge losses in this deal. To deal with this the books of Satyam were cooked to show the company in good health and Mr. Raju expected to fill the gap in the coming years. But as the fate turned out the gap instead of filling got widened year after year until one day it became impossible to continue with it. The Satyam Maytas (Satyam spelled backwards) deal was a plan to fill this gap. The Maytas promoted by the sons of Raju was a real estate company and Raju planned to fill the fictitious assets of Satyam through real assets of Maytas on a payment of $ 1.3 billion. The payment was not actually to be made (all in the family). But the investors and share holder fury did not allow this to happen. And finally Raju was forced the directors of the company to issue a confessional statement.

The employees of Satyam, most of whom did not have any hand in this crisis are now paying the price of the evil deeds of their employer. Raju who was a hero and a model entrepreneur has overnight become a vilon.

The employees of Satyam have done no crime the government should take care to see that the company continues to operate. It was the last thing we needed in the time of "Global Slowdown".