Anyone and everyone’s mother in law seems to be discussing the Satyam scam, its repercussions and also as to whether it is only the tip of the iceberg. Here is my few paise worth on this matter if anyone would care to know.
First things first – was it huge or what – you bet it is huge… you are not talking of fudging books and making off with a few thousand rupees – you are talking of a few thousand crores. Now the allegations are coming fast and thick – last week some papers had a report that the authorities are checking out whether the employee count was 53K or substantially less. There was another report that they are investigating a possible visa scam. I am sure that there will many more allegations and investigations in the weeks to come.
The question as to whether Raju was the only player in this story seems prima facie absurd... Come on, you don’t need to be smarter than a fifth grader to guess the answer! In my company (in any organization for that matter), any claim, any single rupee / dollar that goes out or comes in does so under the watchful eyes and ever sniffing nose of the accountant-saheb. I am sure that many more skeletons will come popping out of the closet in the weeks to come.
Finally the larger question as to whether this is the tip of the iceberg – i.e. are such practices the norm and is this end of the world for the IT services industry?
IT services companies as we know them today have grown and matured with time over the past 2 decades. Yes, during the initial phase of growth when these organizations were small and the growth exponential, when processes were non existent and accountability nil, there may have been organizations that were not playing by the rules. We have come a long way since then. These companies have grown and matured. Processes and checks and balances are in place. The stakes are too high and they would be dumb if they participated in large scale fraud.
The natural question then is what happened with Satyam ? The difference between the others and Satyam is that here was a guy from a land owning background who made it big beyond his wildest dreams, suddenly falling prey to a big vice – greed. Land became a passion, and from there started the fall. Once the shares and the real estate became worthless, the shylocks came for their pound of flesh – there was no escape from there on.
The recession was probably the only reason the scam saw the light of day. I am an optimist. The lessons of Satyam will make the industry stronger and hopefully bring in better corporate governance across the board.
