The massive Satyam corruption scandal engulfs India in a sad and chilling way somewhat remindful of WorldCom, Parmalat, and Enron.
Sad, for example, because of the tens of thousands of talented workers whose future is under heavy cloud (any bailout for them?!), and chilling because it reveals but a small part of the disordered “backyard” that Sathya Sai Baba famously said he would first “clean up” before transforming the rest of the world prior to quitting it circa AD 2022. And, again sadly, because such scandals can also obscure many instances of probity and quality of service.
Note: In Sanskrit, Satyam and Satya (or Sathya) mean: Truth! Interestingly, the Raju family real estate company into which the self-admitted fraudster B. Ramalinga Raju poured money from Satyam Computers is called Maytas – which is Satyam spelt backwards. In short, and irony-filled, truth reversed …
India Now In Glare Of World Scrutiny
India’s many corrupt political and other leaders from across a broad political spectrum – the same figures who for decades have been complicit in the massive cover up of Sathya Sai Baba-related scandals – are now under intense world focus. Hundreds of Satyam clients are Fortune 500 international companies. Therefore, it is unlikely that these leaders can do other than join a sudden rush to effect matters such as accountability, transparency and due diligence. As far as it goes.
It will be interesting to see, as the rotten apples begin to fall from India’s old and gnarled tree, how many of them and their close affiliates have close ties to Sathya Sai Baba – for example, in financially supporting him.
It is too bad that India has no legal and other protective mechanisms for whistleblowers. Much is made about the need for government regulation. But what shall be the case when veniality – in the form of nepotism, casteism and gerontocratic clinging to power – exists so widely among India’s politicians and other power elites? Who shall regulate the regulators?
Far too much, therefore, will remain hidden.
The chief perpetrator, B. Ramalinga Raju, has admitted his crimes (at least some of them) and is now, along with his brother, B. Rama Raju, in police custody in Sathya Sai Baba’s own State of Andhra Pradesh. Ramalinga Raju has said that he acted alone but the credibility of such a statement is wide open to question and there may be more arrests. Indeed, CNN (see below) has just reported a third arrest, that of Vadlamani Srinivas, who was Chief Financial Officer in Satyam Computer Services.
Satyam founder B. Ramalinga Raju shown being sent to prison in Hyderabad
Reuters reports (Thu Jan 8, 2009):
“Chairman Ramalinga Raju resigned on Wednesday in India’s biggest corporate scandal in memory, after saying that about $1 billion, or 94 percent of the cash and bank balances on the company’s books at end-September did not exist. The company’s shares plunged nearly 80 percent”.
Will India’s Strengths Overcome Repute For Endemic Corruption?
Perhaps the high quality of services worldwide of giant Indian companies like Tata Consultancy Services (TCS), Infosys, Wipro and Satyam itself may help India weather the current storm, which comes at a time of global financial upheaval, and recent terrorist attacks in Mumbai, India. See article: Hasty Cover Up Of Sai Baba ‘No bombs in India’ Blunder. Posted by Barry Pittard on December 7, 2008.
Some Saving Graces For India?
The prestige issue here is that international client satisfaction has been the yardstick, and not the say-so of India’s spin doctors. Even so, it is feared in many quarters, India may suffer grave challenges to its thriving outsourcing sector. Hasty international reactions need to be avoided.
Status of Indian Corporate Governance Gravely In Question
Huge questions are raised about corporate governance in India, including in Andhra Pradesh where the Chief Minister Y. S. Rajasekhara Reddy is a notable supporter of Sathya Sai Baba, and complicit in the profound Puttaparthi and local, state and central government cover up of the many scandals involving Sathya Sai Baba and his core officials. Former Chief Minister of Andhra Pradesh, N. Chandrababu Naidu (see Press Trust of India report below) just claimed that the Satyam scandal was due to “greediness and mania for money” of Congress rulers.
Andhra Pradesh CM Y S Rajasekhara Reddy with Puttaparthi Sai Baba
.
……………………………………………..
Extracted from BBC WORLD NEWS summaries of some major media reactions
Press reaction to Satyam scandal
Thursday, 8 January 2009
News that the head of Satyam, India’s fourth-biggest software firm, has quit after revealing false accounts including some $1bn (£663m) in fictitious reserves has made the headlines and editorials across the world’s prss.
………………………………..
THE ASIAN AGE
Though Raju says he alone is responsible for what has happened, there has obviously been collusion on the part of the company’s accountants, chartered accountants, banks, and maybe even politicians, in the fraudulent financial engineering that he managed so adroitly quarter after quarter
THE NEW YORK TIMES
In the end, the scandal threatened to gobble up not just Mr Raju, who resigned, but his company, Satyam Computer Services. Far beyond Satyam, it raised fears that similar problems might lurk in other Indian companies, particularly in its vaunted outsourcing industry.
Further News Sources
FOX NEWS
The U.N.: Satyam’s Spreading Stain
George Russell. Monday, January 12, 2009
The World Bank, a cornerstone of the United Nations’ global anti-poverty effort, failed to tell the rest of the world organization that it had banned now-imploding Satyam Computer Services last February from further business following a corruption probe — and thus allowed the U.N. to enter into a $6 million deal for technology services with Satyam as recently as this July, FOX News has learned.
U.N. officials were still silent in the wake of questions sent to them by FOX News last week about the $6 million deal between the U.N. Secretariat and Satyam Computer Services, the Indian communications technology company that is embroiled in the largest financial fraud in that country’s history.
Details of the contentious contract, reference number PD/C0102/08, are prominently displayed on a U.N. Procurement Department website, commonly accessed by procurement officials from across the U.N. System.
……………………………..
PRESS TRUST OF INDIA (PTI)
Satyam scandal due to Cong rulers’ ‘greediness’: Chandrababu
Hyderabad, Jan 13 (PTI) TDP president N Chandrababu Naidu today claimed that the Satyam scandal was due to “greediness and mania for money” of Congress rulers.
He told reporters that Maytas, promoted by former chairman of Satyam Computers B Ramalinga Raju, had grown into a big company in the real-estate sector due to the patronage of the Y S Rajasekhara Reddy government.
Greediness and mania for money are responsible for the Satyam fiasco, he said.
“Maytas was a small company in 2003 when I was the Chief Minister. But now it has grown manifold with the state government handing out multi-crore rupee projects on a platter,” he said.
He wondered why YSR was “so interested in Maytas”, saying projects worth over Rs 36,000 crore were awarded to the company without following due procedure.
“Nobody ever asked these types of favours during my tenure,” he noted.
It was only to divert public attention from the large-scale corruption under the current dispensation that his name was being dragged into the Satyam scandal, he claimed.
“I promoted not only Ramalinga Raju but also other businessmen from the state. I took them abroad to seek foreign investments into the state. My only objective was to improve the state’s industry,” Naidu asserted.
He said that Andhra Pradesh’s image has taken a severe beating because of the Satyam episode and wondered if any investor would come forward to invest in the state.
……………………………..
CNN
Third person arrested in Satyam scandal
NEW DELHI, India (CNN) January 10, 2009 — The chief financial officer of India’s Satyam Computer Services Ltd. was arrested Saturday, the third person taken into custody in a scandal that began when the company’s chairman admitted inflating profits with “fictitious” assets and non-existent cash.
Vadlamani Srinivas will appear Sunday before a special court, said A. Sivanarayana, additional director general of police in the south Indian state of Andhra Pradesh, told CNN.
……………………………..
Some Articles on the India that Sathya Sai Baba has long said he will rescue; – at: Call For Media and Government Investigation of Sathya Sai Baba
Shivraj Patil Falls From Home Ministry
Posted on December 2, 2008
Quote:
“A major follower of Sathya Sai Baba, Shivraj Patil, has resigned as India’s Home Minister. Grave questions have been asked about the competence of Patil and others who were meant to be guarding India’s security.
Comment: Whichever Indian government is in power, Sathya Sai Baba has many devotees who are in all ranks to the highest pinnacle of power. The same is true for the armed services, the judiciary, business and finance, industry, the arts and sciences, and so forth”
Two Indias. Barry Pittard Reflects On India Days
Posted on October 12, 2008
Quote:
“During the number of years I lived in India, I was able to see across-the-board social uplift work in some of India’s poorest villages. One of my strongest observations was the manner in which, for many years, one outfit refused to accept financial input from abroad. A great emphasis was laid on challenging the consciences” […]
Human Rights World Report 2008. India In Sore Shape
Posted on September 2, 2008
Quote:
“The Human Rights Watch World Report 2008 is in marked conflict with Sathya Sai Baba’s promises made over many decades. He has said that he would first save India and then the rest of the world – this within his own lifetime.
His millions of followers hear his blatantly untrue statements but remain silent and blindly” […]
Call For Media and Government Investigation 
You must be logged in to post a comment.