Jan

7

Good riddance..bye bye Satyam

January 7, 2009 posted by indiatime |

The final nail in Satyam Computer’s coffin may have come today with the resignation of chairman Ramalinga Raju. Satyam’s shocked investors now know for a fact that 93% of Satyam’s reported balances were falsely reported. The investors have been kind to Satyam so far, since its shares have fallen only 70%.

And what does Mr. Raju, the award-winning chairman have to say to the domestic and foreign investors? A not-so-contrite admission of ineptness and stupidity - Revealing that none of the board members, past or present, had any idea of the company situation, he pretended to seriously analyze the issue at hand. “…What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years….”, said the Satyam chairman, “….it was like riding a tiger, not knowing how to get off without being eaten…”. Chairman Raju didn’t get off that tiger easily, until the anger of the enlightened foreign investors kicked both his and his tiger’s asses.

Some experts are calling this India’s own Enron. Many others fear this sordid saga might cast a long shadow on other Indian companies. You can bet that there are other Indian companies out there who have probably done similar falsifications. At the same time, there are many that have not.

The timing on the fall of Satyam’s star couldn’t have been better for the average investor and it has come right in the midst of a deep fear psychosis among the overall investor community. It is almost like having an altogether separate serious condition being diagnosed while the patient is already in intensive care for some other ailment. It would have been much deadlier, had the revelation come with the patient (or the market) in recovery.

What now? At this moment, the Indian market sure feels stinky. But this is good riddance. This is actually a good day. And we’ve learnt something, haven’t we? Just because a company’s name literally means ‘the truth’ and just because its chairman’s name literally means God’s sex organ, that doesn’t make the company a good buy.


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5 Comments so far

  1. naren on January 7, 2009 10:27 pm

    That’s right. Even Indian newspapers admitted that it was the foreign investors who trashed Satyam stocks and woke us up to the reality check- that this check had no cash reserves to back it.When will our corrupt leaders- financial and political- stop treating our country like their personal property?Except that one doesn’t trash one’s own property. And how long will our masses remain under the delusion and trust even one word that is promised them by the leaders?

  2. dhaval on January 7, 2009 11:12 pm

    Very sad and very unfortunate for those people who put their good money in this company. The CEO and even the board of directors need to be held accountable and should do long jail time for this. Let’s not forget that the chairman and his family are still worth millions and have all the means to escape the country and go hide somewhere else.

  3. Ramesh Srivats on January 8, 2009 12:43 pm

    When he does get on trial, the chairman could use defence 2.0.

    http://www.rameshsrivats.net/2009/01/satyam-chairman-on-trial.html

  4. links for 2009-01-08 « Unjustly on January 8, 2009 7:00 pm

    [...] Good riddance..bye bye Satyam : It’s Indiatime What now? At this moment, the Indian market sure feels stinky. But this is good riddance. This is actually a good day. And we’ve learnt something, haven’t we? Just because a company’s name literally means ‘the truth’ and just because its chairman’s name literally means God’s sex organ, that doesn’t make the company a good buy. (tags: business satyam fraud) [...]

  5. Ethics alert for India Inc. : It’s Indiatime on February 27, 2009 2:37 pm

    [...] Good riddance..bye bye Satyam [...]

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