It was sometime in the early nineties that one started hearing about this company. What was felt unique was the very name of the company. It was called Satyam. Satyam in any Indian language (including the original language Sanskrit) means Truth. What was surprising was that no one thought of a name like that before, to name a company, that too one in technology sector. Most of the names hitherto were jargon based. The motto of G o I is Satymeva Jayathe. The very statement is the ultimate truth. It says Truth alone prevails. One has always felt that it is simply not possible to do business always in hundred percent truthful ways. Thus I was really enamored in someone naming the company as Satyam.
Soon thereafter, Satyam came into prominence of having bought a dotcom company (Indiaworld) at a value that is 500 times higher than the company’s turnover. This happened during the dotcom boom and at the century changeover. Dotcom companies were evaluated on crazy parameters such as eyeball counts etc. This news really created a feeling of ‘awe’ in everyone. Somehow, it did not jell for me and I suspected some hanky panky in the transactions. My thoughts were getting clearer. Satyam is not that Satyam, I thought.
Time flew. The company came to the fore as one of the topmost technology companies of the country. With global footprint and fortune 500 clients, Satyam grew very well. The company crossed USD 2 billion turnover in the course of time. Its chairman was very highly rated. He became the E&Y global entrepreneur award winner. The company received Golden Peacock award for excellence in corporate governance. Five of its independent directors were the who’s who in academic circles. It was sort of, Satyam had arrived. Like everyone, I too was watching it.
Then came the news. That of Satyam’s board deciding to buy the controlling stakes 2 infrastructure companies headed by the sons of the Chairman of Satyam. The evaluation of the stock of companies was done at the highest level. And Satyam was going to spend a fortune buying them over.
It is very strange to hear the name of the two companies. They began with the name Maytas. Maytas is the word Satyam reversed. From the beginning, it looked as bad omen. By the way, what happens when you reverse satyam? The truth will become lies. And here too, it was the same. The investing public, the stock market, the regulators and the opinion makers were in unison in denouncing the deal as a shady one. The stock of Satyam tumbled, globally. (Mind you, Satyam is traded in NASDAQ & NYSE!). Within no time, the company reversed its decision but not before the well-known independent Directors of Satyam Board coming under the questioning glare and the ire of the public. The winner of Golden peacock in corporate governance taking an agenda centric decision like this was unthinkable to many. That too when the chairman and his ilk’s were owning only 6% of stakes of the company!
Two weeks passed. Then comes another hit and this one came from the World Bank. One of senior executives of World Bank dropped the bombshell to the media that some months back, Satyam was blacklisted for the next 8 years by the Bank for data theft. Lo and behold! There lies Satyam, brutally wounded, shattered, and in total negative publicity. At the time of making this post, one reads about Satyam trying to take the Bank to the court for making inappropriate statements. Now what is that?!
You must remember that all these are happening when the company is not doing well and the market conditions are bad. Satyam has been doling out pink slips to many of its employees. The company had started down sizing the employee numbers back in September 2008 itself.
One does not know what the provocation was. Some business dailies had been writing about Satyam moving out of IT to Realty. Whatever that be, the company is in some bit of trouble. Is nemesis catching up with Satyam? Or is it getting caught for its misdemeanors? Looks like within 2 decades of its birth, life is coming to full circle for Satyam. One thing is clear, after all, everything that happened inside Satyam was not truly satyam.
We are living in the days of perception being considered as ultimate reality. With PR positioning, advertisement and continuous corporate communication, today it is possible to create whatever perception that you want in the minds of stakeholders and the public. The name Satyam itself looks as the ultimate idea of a corporate blitzkrieg. But somewhere on the way, the stripes went away and the original colors got exposed.
Friends, what is truth? Is truth a created one or is it something that lies deep inside the object, original to itself, as very much part of it, like, say, the DNA.
For the time being, let us all pray; Satyameva Jayathe!
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2 comments:
Indian middle class has no values. Make money, be successful at any cost - this is the mantra of 2000. Rapid success is the problem here.
Satyam is only the tip of the iceberg. Indian corporates who have sprung up to billion dollar corporations lack ethics in the manner they treat their people, suppliers, customers and if that be the case they treat shareholders too like dirt.
To my mind, Indians talk about Karma. Essentially, when a 3rd world economy starts moving into G10, it needs to emulate the G3 in terms of its values, the way these leaders take care of their key stakeholders.
This is a thought process which is lacking. 1 NR Murthy is not enough for India, there has to be 500 leaders like him.
Unfortunately, the captains of Indian industry are hoodlums turned into businessmen.
This is my view on this:
Founder Promoters are not to be mishandled and left lonely. They do a lonely job in the Indian context The Board and Shareholders have been irresponsible by destroying value in a company with such clientiele, revenues, standing and employee commitment.
The Board and shareholders could have given Raju a golden handshake, send him on leave.. (considering he has little or no shares in the Company) or done a deal in congruence with Raju to salvage the Company. Instead they resign and shirk responsibility and let his take blame for the mess. The Board and Shareholders rely too much on the Founder Promoter. All media blame only Raju for the mess - please - what was he doing and who benefitted ? Customers got value, people got jobs, non execs got paid, banks made interest and charges. He has lost everything he did over 20 years. Its hard to believe that he is such a hollow leader. His letter of disclosure was BRAVE and he also gave SUGGESTIONS to resolve them. Further, he is willing to be tried in Courts.
It is for the Board, employees and shareholders own up their responsibility now.
The fact is minus the fearless leader - Satyam is worth what it is today.
Indian Non exec Directors want to be on the Board for glamour, biscuits and financial benefits rather than help the Founder Promoter in times of a crisis. If they did know their roles, Raju would have lost still his job, but would not go to jail. Corporate governance is about talent at the Board and Shareholder level. Policing is the regulators job.
None of the non exec directors spoke against Raju in their resignation. With a wide spread share holder base of FIIs owning 42% it is highly impossible for analysts to have not, not notice such a big cash flow issue. Thats what analysts do.
Krishna Palepu is on the Board for personal gains. He was on the Board of Global trust bank. When GTB collapsed, Sucheta Dalal said it is the failure of the shareholders - they had enough time to sack the Board and get a new one. Now I believe, he is being removed from Dr Reddy's board - keep it up India is waking up from slumber.
Here is a man who recruited the first customer, first employee, first non executive director. Its not a mean task to make it a Rs. 10 Crore Co forget a Rs. 4500 Crore company.
If Raju is a crook who can cook the books. Why cant we all cook our books and create USD 2 billion revenues.
Please realise people costs account for 30 to 50 pct of a labour oriented business. If in one year something went wrong, he signed on the balance sheet and put his butt and life on the line to save the interest and aspirations of his team.
Is it easy to build and retain a team. Employees are selfish. They are stuck, so they are lobbying to muster support to keep their jobs. Else they will default on their home loans, maruti wagon Rs.
Starting a business is a lonely job. It is not fair to have so much dependance on 1 man to make everything happen in a large company.
India Inc needs to develop a school for Non exec directors and issue pamphlets on shareholders responsibility in Companies. This is a classic case where reputed directors are deserting the slightly less reputed entrepreneur at his low point. This may be a good time to buy up Satyam shares..
Besides, SEBI, ICAI, IBA, Nasscomm must include consumer/common man's protection in their mission statements.
I have no remote connection with Raju or Satyam. I am a villager from Elamkunhapuzha who has started a business and been through this exercise of snake and ladder.
India is a 3rd world country. A lot of things about India are still 3rd world. And we talk about India and its values as the emperors new clothes.
Rajesh Venugopal
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