The scandalous satyam cloudburst over the country at a time when Indian business and industry is desperately trying to sustain its growth momentum following the economic meltdown in the US and the West, has ominous implications for India’s belated national development effort of the 21st century. The ease with which the promoters of the Hyderabad-based Satyam Computer Services Ltd (SCS) — B. Ramalinga Raju and his brother Rama Raju — were able to persuade so many people for so many years that they were competently managing a $2 billion (Rs.10,000 crore) publicly listed blue-chip company with a worldwide clients’ base while actually siphoning off huge amounts for their own use, indicates something radically wrong with the auditing and governance systems of corporate India. This billion dollar swindle has placed the credibility and probity of India Inc at risk.
Contrary to popular press and media opinion, the great Satyam scandal is not just another corporate scam. Befitting its blue-chip status as one of India’s big four customised IT software companies, the SCS management had appointed high-profile and highly respected professionals including a Harvard Business School professor and dean of the state-of-the-art Indian School of Business as independent, well-remunerated directors. Moreover PriceWaterhouseCoopers — a globally renowned firm with operations in 150 countries — was the statutorily appointed auditor of the company for over a decade, before the scandal broke on January 7.
Nor were these the only safety nets strung up by the Raju brothers in ostensible compliance with the rules and regulations of SEBI, the National Stock Exchange, NASDAQ, and the New York Stock Exchange on which the company’s equity shares are traded. SCS was also under the implicit supervision of public sector banks with whom it claimed (in its widely publicised quarterly reports) to have been maintaining large cash balances. And let’s not forget the array of stock market analysts, stockbrokers and investment experts who spout impressive jargon on television and in the pink press.
It’s high time the media and the public learned to connect the dots. For several years the Geneva-based voluntary watchdog organisation Transparency International has been highlighting India as one of the world’s ten most corrupt countries. Translated, this means the overwhelming majority of this country’s population is purchasable by swindlers and crooks for nefarious acts of commission and/or omission.
The shameful truth that the country’s supra-nationalists must learn to acknowledge and address, is that a pervasive culture of corruption originating in the nation’s amoral political class has permeated the national DNA. During the past 12 months, the state government-appointed Lok Ayukta (ombudsman) has exposed — as testified by blaring media headlines — over 100 petty and exalted government servants in Bangalore and Karnataka for possessing assets vastly disproportionate to their known sources of income. Yet the Karnataka government brazenly refuses to sanction their prosecution. A society which has squandered its ethical inheritance and pawned its moral compass, needs to seriously address broader issues concerning the nation’s law, order and justice systems to prevent scams of the Satyam genre.