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Friday, December 11, 2009

Satyam: The Underlying Truth

“Man with all his noble qualities—with sympathy which feels for the most debased, with benevolence which extends not only to other men but to the humblest living creature, with his god-like intellect which has penetrated into the movements and constitution of the solar system—still bears in his bodily frame the indelible stamp of his lowly origin,” said the famous English biologist, Charles Darwin.
Another equally famous Englishman—the Bard of Avon—said as much, of course, much earlier to the scientist, but in a different style: no man is a single entity. Intriguingly, the Bard also said that it is the moment of success that could prove dangerous for man. For, amidst successes, emotions run high and in the resulting festive mood, the cautious intelligence and common sense, which are otherwise known to guard the human personality, slacken making it too weak to resist the entry of untoward and unwelcome elements—temptations—into the being, letting them ignite one’s dormant temptations. One such devastating temptation is: man’s ‘vaulting ambition’. It is at one of those weak moments that the evil element—vaulting ambition—coolly sneaks into the invisible domain of thought, altering the visible actions of a man. But the pity is when one commits a blunder under the influence of one part of his being, the whole part has to suffer its consequences.
Incidentally, it is one such instance from India Inc. that has today become what an industry insider rightly termed as “Ripley’s Believe It or Not”. Ramalinga Raju, the disgraced Chairman of Satyam Computer Services, has all along been considered as one of the pioneers of the Indian Information Technology boom. In a short span of two decades, Raju, with an unrivalled assiduity and enterprise, built an incredibly innovative company, Satyam—the fourth largest software services company of India—studding its Board with respected academicians and professionals of world standing. Backed by a strong contingent of 53,000 highly skilled professionals, Satyam offered services to more than 600 clients across the globe. Under his stewardship, Satyam not only met the expectations of analysts year after year, but also made a big difference to the lives of the millions of Indians. As a part of corporate social responsibility, Raju launched an ambulance service to ferry poor patients to hospitals for quick medical relief. Raju and his Satyam thus earned many laurels from within and outside the country: in the year 2007, Raju became the Ernst & Young Entrepreneur of the Year; and in the year 2008, his company won the Golden Peacock award for excellence in corporate governance.
True to the paradox of life, it is the same Raju who wrote a letter on 7th January to the Board of Satyam, admitting his fudging of the company’s balance sheet, creating a hole of more than $1 bn, that too, in cash alone. His apprehension about riding a “tiger, not knowing how to get off it without being eaten” had perhaps so hardened his heart that he, as confessed in the letter, continued with his fudging of figures for years, at length transforming himself into a ‘hellhound’ for the stakeholders of Satyam. This shocking revelation has come as a horror to India Inc., for it undermined one’s faith in Indian corporate governance. Raju thus ended up in a jail, languishing along with bootleggers—away from “honor, love, obedience, troops of friends” and all the graces that should accompany the good that his other part of the personality did earlier.
What does this mean to India Inc.? The saga of Satyam—a reflection of the disastrous state of affairs into which the confederacy of vaulting ambition and evil throw a leader, ruining all the good done over the years in no time—is “a good warning signal for all managements.”  And the underlying Satyam (truth) in the warning is: punishing the bad decisions of even the erstwhile good people becomes a ‘cruel necessity’ to restore credibility to India Inc.

- GRK Murty


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