Corporate India had a beating. It is reportedly the biggest ever corporate fraud in India. Ramalinga Raju had lied. Lied to the stock holders, lied to the employees, lied to the government, and finally lied to the people of India while taking awards for corporate governance.What made him to so? It is not that he is making losses while doing the business. It is because hugely funds were diverted. No body continues his business for a long time incurring losses. But he did it thinking he would make them up by earning in some other place. He can be falsely be identified as looser due to global financial meltdown, though not in the direct sense. The golden goose which he trusted crumbled like a pack of cards due to world wide recession. The goose is the real estate. Born and brought up in agri rich coastal Andhra we have to finally conclude that he truly had not shed his feudal shrouds, and continued with his love for land.The bubble busted and he does not see any body to lend him crores to run his show.
This is not the culmination of affairs overnight. He has been doing systematically over years. What made him to disclose the facts deliberately at this point of time?. It is simple understanding that he is choosing a lesser evil. No doubt there would many more startling discoveries as they unfold. Our great Indian enthusiasts are too good at hounding a declared criminal as lone sinner on the planet, with governmental agencies in a hurry to clean their dirty hands, banks too worried about their money, politicians too hasty to clear their election prospects, police too anxious to prove their mettle. Till such time every thing around them is heaven.
Making a foul cry about the 53000 employees of Satyam (doubts casting even on these numbers) slashing their credit limits, demanding additional collaterals or guarantors for their housing loans, people are getting too panicky. Certainly it is not the end of the world for these young trained professionals.
Frauds, manipulations, bribes, back end cuts, are regular practices in our business world. No one is really interested to set them right, as they too get their piece of cake. To a great extent Indian corporates are family businesses. They are run with their family members forming majority of board of directors with addition of one or two well known outsiders effortlessly passing resolutions to suit their convenience. When they plan to go public to swindle public money they go with inflated balance sheets which are more simple than cooking a Maggie with mushrooming charted accountants found every corner of the street. Share holder's meeting are rituals. If one concerned brave heart dares to question them he is snubbed by the company appointed or hired men sitting in the venue. Finally every thing is fine till they turn their boards. Financial Corporations, infrastructure corporations run into reds with so many their internal functionaries hand in glove with the defaulted companies. Many consortium of banks survive by providing for losses each year hoping to recover their money by selling the mortgaged mutilated properties, in practice many pose multitude problem while liquidating them. The promoters already make their money back in their first year of gong into public it self . Virtually they make no losses. None of their private properties can be attached. This is the story of medium sized corporate India who turn coats.
In this case of Satyam the auditors of the company Price water coopers' role is highly questionable. Non existent cash and bank balances of 5040 looks silly to my simple mind, as no entrepreneur would like to keep idle funds amounting to crores in the banks with each rupee un utilised is equivalent to incurring that much loss to him. Accrued interest of 376 crores, debtors of 490 crores, can not be certified without verifying the records of market credits and banker's interest certificates and statement of accounts. Every account looks so bizarre making it unbelievable that it could be cooked up so well without the knowledge of the any member of the clan except Raju. Diversion of funds, unethical practices are part of corporate governance in India. Statutory auditing is the only way to check these undesirable trends. ICA need to be more strict in cancelling the licenses of the practitioners who lend their supporting hand to such corporate crimes.
What would be the impact of the Satyam debacle on IT Corporate of India? Perhaps the other three IT majors may get the benefit. It can also boomerang. Unquestionably it did a damage to corporate India. That too it came in real difficult times. As IT sector is facing the wrath of global recession coupled with apprehensions about the outsourcing policies of new government in US, they may need to go an extra mile to prove their credibility and innocence to the world at large. So far they have been enjoying a blissful distancing from the governmental regulations, due to riches it brought to the country, as well due to it's technicality which is beyond the comprehension of the rusted governmental bodies. Now it is more vulnerable and it has to preserve it self from the system which is more known for it's breaking than making.
From the incidents happened, it is very clear that we have not become global players yet. So highly acclaimed fourth largest IT giant is falling like a "Baniya Dukan" tracing it's roots to West Godavari Coastal Corridor rural mind set of petty business with a small mind. We have to go a long way learning lessons of professionalism with broader global out look and rules of fair play.
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