Saturday, January 24, 2009

Abject Failure – Satyam

First, my apologies. It has taken me a while to post some of my articles even after receiving responses from my avid blog readers. Actually, I had not been keeping well. Anyway, I have been following the news for at least a fortnight now and some of things which interest me at present are – Omar Abdullah – the present chief minister of Jammu and Kashmir, Barack Obama – the US president, Rehman and SATYAM now known as India’s Enron.

SATYAM – can one say it’s an abject failure? Once upon a time the dream company for any graduate - has turned it future from riches to rags. The rise and fall of Satyam can be a big concern for India particularly when the whole world is hit by rescission. Satyam which is India's biggest corporate scandal in memory till date has threatened future foreign investment. It has brought into question the levels of corporate governance in the country and has cast an ugly shadow on the once shining image of Indian industry overseas. Satyam fraud can be the greatest threat to India’s corporate reputation unless handled proficiently.

Everyone associated with Satyam has lost something or the other. Some lost money, some lost their reputation. The big question is, will we learn something from this remorseful episode? It is believed that this fraud was going on for a number of years. During all those years, the auditing companies (one among big fours -PricewaterhouseCoopers) and independent directors did their jobs wonderfully but failed to identify anything. As per Dr Madhav Mehra, President World Council for Corporate Governance,” The biggest challenge for the companies is how to combat the culture of cosines in the board. We need independent directors who are trained to ask awkward difficult questions and have the courage to belch at the dinner table.”

As history has shown us repeatedly those who don't operate in a moral and ethical manner will eventually fail as in the case of Satyam.


Ravi Kishore said...

I see a Burkha Datt in making....Totally agree with your perspective...

Anurag said...
This comment has been removed by the author.
Anurag said...

an article well written no doubt, but i think there's a correction here.. The satyam management couldn't have carried out a fraud of such a magnitude without the help of its auditors- PWC. Also, 2 directors from PWC have been arrested in connection recently..

Raj Shekhar Jeeee said...

A very thoughtful post indeed. I wish I had some more to read. Satyam - an irony of the name itself, the image has been tarnished,battered and severly bruised by the unmaking and misappropriation by the promoters owing to their own self motives. The 'India Shining' campaign has taken a bad dent and one of the worst hit are the hapless employees. It is aptly said 'A-satya Satyam'.
Great post....just wanted some more food for thought to read.