Satyam: A decade on

Satyam: A decade on

Despite tighter corporate governance norms that Satyam scam triggered, India Inc continues to shock investors.

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E Kumar Sharma
  • Jan 7, 2019,
  • Updated Jan 8, 2019 10:13 AM IST

Ten years ago today, Byrraju Ramalinga Raju, as the chairman of Satyam Computer Services, wrote that fateful letter to his board members admitting that the books of the company had been cooked. Couple of days later, Raju was arrested and the Criminal Bureau of Investigation (CBI) took up the matter in February that year.

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Financial frauds and issues around slippages in corporate governance kept financial journalists engaged in 2018, but much like the certainty of elections in 2019, most were unable to stay comfortable with the fact that the start of 2019 would also mark a decade since Satyam happened and it being still an open case.

Business Today last year reached out to several people, who were either involved in dealing with the aftermath of the developments or are known experts in the areas of corporate governance and in accounting. Various people, at different points of time during the year, starting from the second half of 2018, shared their thoughts.

Within 100 days since Raju's letter, India created a history. With proactive involvement of the government, a first- of- its- kind experiment globally was set in motion as the government and the private sector worked together to quickly get the company back on its feet, led by a six-member board appointed by the government.  "I used to hear people referring to it as a lesson that the West has to learn from India on how to resurrect a company from a crisis," says T N Manoharan, one of the members of a six-member board. He is today an independent director on the board of Tech Mahindra. Post scam, Satyam morphed into Mahindra Satyam, which later merged into Tech Mahindra. In fact, Kiran Karnik, the former president of NASSCOM and a thought leader, who was also a member on that six-member government -appointed board, recalls how neither in the US nor Europe could he find any instances, where a company had gone through a major fraud and had been put back on track. "It only meant we had no experience to learn from and that only got us determined to demonstrate that India had the capability and the resilience to be able to handle it. That was the key challenge and the key differentiator ."  He says so with good reason. After all, as he also points out, "West has made the declaration of bankruptcy too easy and companies just wind up". If you have any doubt? Think of the Enrons and Andersons.

But Satyam is still an open case and it is for the courts to pronounce the final view and judgement. As the case stands, Raju, his brother and eight others, having served a few months in jail, was later sentenced by a lower court with imprisonment. However, they have appealed against it and are out on bail with appeals pending before various courts for various cases.

  • Judicial reforms for expeditious conclusion of cases
  • Recent incidents of Nirav Modi and other cases and the handling of affairs, especially that of charge sheet on independent directors.

Ten years ago today, Byrraju Ramalinga Raju, as the chairman of Satyam Computer Services, wrote that fateful letter to his board members admitting that the books of the company had been cooked. Couple of days later, Raju was arrested and the Criminal Bureau of Investigation (CBI) took up the matter in February that year.

Advertisement

Financial frauds and issues around slippages in corporate governance kept financial journalists engaged in 2018, but much like the certainty of elections in 2019, most were unable to stay comfortable with the fact that the start of 2019 would also mark a decade since Satyam happened and it being still an open case.

Business Today last year reached out to several people, who were either involved in dealing with the aftermath of the developments or are known experts in the areas of corporate governance and in accounting. Various people, at different points of time during the year, starting from the second half of 2018, shared their thoughts.

Within 100 days since Raju's letter, India created a history. With proactive involvement of the government, a first- of- its- kind experiment globally was set in motion as the government and the private sector worked together to quickly get the company back on its feet, led by a six-member board appointed by the government.  "I used to hear people referring to it as a lesson that the West has to learn from India on how to resurrect a company from a crisis," says T N Manoharan, one of the members of a six-member board. He is today an independent director on the board of Tech Mahindra. Post scam, Satyam morphed into Mahindra Satyam, which later merged into Tech Mahindra. In fact, Kiran Karnik, the former president of NASSCOM and a thought leader, who was also a member on that six-member government -appointed board, recalls how neither in the US nor Europe could he find any instances, where a company had gone through a major fraud and had been put back on track. "It only meant we had no experience to learn from and that only got us determined to demonstrate that India had the capability and the resilience to be able to handle it. That was the key challenge and the key differentiator ."  He says so with good reason. After all, as he also points out, "West has made the declaration of bankruptcy too easy and companies just wind up". If you have any doubt? Think of the Enrons and Andersons.

But Satyam is still an open case and it is for the courts to pronounce the final view and judgement. As the case stands, Raju, his brother and eight others, having served a few months in jail, was later sentenced by a lower court with imprisonment. However, they have appealed against it and are out on bail with appeals pending before various courts for various cases.

  • Judicial reforms for expeditious conclusion of cases
  • Recent incidents of Nirav Modi and other cases and the handling of affairs, especially that of charge sheet on independent directors.

Read more!
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