Morgan Freeman, in the Hollywood blockbuster , Bruce Almighty, flashes his characteristic 'I-am-GOD' smile and says "It’s a wonderful thing. No matter how filthy something gets we can always clean it right up". The audiences world over applauded this inspiring dialogue and found a moment of introspection in what was otherwise a comedy flick.
In my opinion, the recent announcements made by the Government of India, is likely to warrant a similar applause. Even while one cannot completely fathom the extent of free fall SATYAM has had, the Government has quickly moved (although many argue that the moves aren't quick enough)and is making plans to revive the company. SATYAM is often being referred to as India's ENRON, the infamous company which was involved in a similar case of accounting fraud and eventually went bankrupt. Bankruptcy is however a painful option in the given scenario. Nobody wants SATYAM to go bankrupt. Not the 53,000 employees of SATYAM, not the IT industry, not anybody. Since nobody likes bankruptcy , the company is most likely to be bailed out. With the Government announcing an independent board of directors to turn around the company ,I can smell that the Government is willing to "clean it right up!!"
The picture might look very rosy, if the Government can somehow salvage SATYAM. The only person sulking will be the pure capitalist. Although the mess might get cleaned up, it will leave a very bad precedent. It will seem to send a message to fraudsters that "it is OK to carry on being unethical as long as you don't get caught. And even if you do, don't worry. The Government will bail you and your thousands of employees out!" I believe that it is in every body's best interest if the Government stays right out of the mess and lets SATYAM go to a bankruptcy. Even if that tends to pain everybody for sometime. "The villain has to die, no matter how gory his death may appear".
The picture might look very rosy, if the Government can somehow salvage SATYAM. The only person sulking will be the pure capitalist. Although the mess might get cleaned up, it will leave a very bad precedent. It will seem to send a message to fraudsters that "it is OK to carry on being unethical as long as you don't get caught. And even if you do, don't worry. The Government will bail you and your thousands of employees out!" I believe that it is in every body's best interest if the Government stays right out of the mess and lets SATYAM go to a bankruptcy. Even if that tends to pain everybody for sometime. "The villain has to die, no matter how gory his death may appear".
As far as the cleaning up goes, I would request that the Government focus on cleaning several other messes including Terrorism and Corruption. I am sure market forces will take care of fraudulent corporates by itself without Government intervention.
4 comments:
The solution perhaps is to make auditors accountable for the Balance Sheets they certify.
No matter what one does with the Balance sheet the auditor is bailed out by simply giving the certificate that IT IS CERTIFIED ACCORDING TO THE BEST OF HIS KNOWLEDGE AND AS PER BOOKS MADE AVAILABLE TO HIM. Now there you are.Yes already there is some move to make C A s accountable.
In U S it is not the case .FDI s it is learnt that they may sue .
TRANSPERANCY IS WHAT IS REQUIRED TO CREATE FAITH.
The move did by government to appoint directors from eminent fields to keep the 4th largest company on track so it can be acquired by others to safeguard investors, clients, employees...i feel, every one appreciated the efforts of the government and they even come forward to lend capital if required to keep running the show. establishing company of this strength is a painful job and i know you appreciate the efforts..
I feel that what the govt did was the right thing.
Its only one individual and his accomplices who committed the fraud and it is they who have to be punished.
"Satyam" does not mean Mr. Raju alone. It means a whole lot of employees and investors who have toiled to bring Satyam to the level where it was till yesterday.
The person who has committed the crime, has been punished. The innocent employees and investors are in the process of being saved by the govt. I feel theres nothing wrong.
I have seen your comments on the Satyam affair. I wonder if we can take an alternate view. Ramalinga Raju might have juggled the figures not with the view of personal aggrandisement, but with an ambitious programme of increasing the infrastructure of his company. In this, he might have taken an undue risk and failed. Who knows, but for the global melt down, he might have even succeeded in his attempt. I am no economist, nor so well versed in modern business. Anyway, don't you think that this is a possible view?
I am thrilled to communicate with a person from Mangalore.I loved my stay of 5.5 years in Mangalore.
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