Satyam Saga: The Real Culprits

 Ramalinga Raju’s confession of fraud could not have come at a worse time. The bears seemed to be on their way out of the market and the economic bailouts seemed to be working. With January, new IT budgets were being planned in the US and the Indian IT companies were beginning to see a streak of light. Until Mr. Raju decided to speak his mind. Suddenly the global monster seems to be out to get the founder of Satyam Computer services, a Billion dollar company and the fourth largest software exporter in India. A crime has been committed without doubt. Mr. Raju lied to his employees, his investors and to the entire world. But is Mr.Raju the only culprit in this entire fiasco? Should he be the only person to be lynched? Even tough Mr.Raju has been large hearted to confess and take the entire blame; the others involved are equally responsible for the loss.

 Investors have lost millions of dollars in a single day. The employees have their jobs to keep but have lost the trust towards their employer. And the entire business world of India has lost its credibility. A single person somehow does not seem to be capable of such a culpable feat. That brings us to the “others”. So who were the others who were involved in the lies? And how have they managed to escape? Should they be considered innocent? Should they be allowed to escape? So who were the others then?

1. The Raju Family

 The family had holdings in Mytas Infra which failed to raise funds for its infrastructure projects. This led to the failed take over bid of Mytas on Dec 16. The entire Raju family along with friends is the culprit number one. If it wasn’t for the family affairs, India’s fourth largest software company would not have been in the dire straits it is in today. If it wasn’t for the shady deals of Mytas infrastructure, Satyam Computer Services would never have had to divert funds and create one of the largest scams in the history of corporate India.

2. The Board of directors

 The one question that comes to the mind during the course of this entire saga is whether the board of directors was really unaware of the entire game plan of the CEO. How can the people who actually run the company not have any knowledge of the financial problems? And if they really were unaware then do they have the right to be in the board? The Board cannot simply wash its hands when the company is in trouble. Haven’t they enjoyed hefty bonuses when the company was doing well? It is really discouraging to see the entire board deny having any knowledge of a scam of such huge proportions. The Board is without doubt a culprit and every member should be slapped with an inquiry.

3. The auditors

  PriceWaterhouseCoopers, the auditors of the company, released a statement that they were not aware of the financial misappropriations of Mr.Raju and believed the documents that he provided. How ironic? The word audit stands for examination of records. And auditors are supposed to do exactly that; verify records. How can an audit company say it had no clue about the financial problems? Isn’t that the very reason for them being there?

The scam has brought forth many problems in the way business is conducted in India and also has raised a question about the auditing practices of companies. Many questions are being raised by investors and many new processes introduced. Mr.Ramalinga Raju may have done the right thing by surrendering himself before the law. A lot of new skeletons wait in the cupboards, ready to be unearthed. As with all bad things, maybe this scam will also bring forth some good things like better audit practices and more transparency in the working of IT companies.

As for the fate of Satyam Computer, one can just hope for the best.