The worst truth of
Satyam computers, the
It was a nightmare for the employees of Satyam, 53,000 people (equal to the combined number of employees of Tata Steel 30,000 and Tata Motors23, 000) flooded with job portals in search of alternate employment.
The Satyam shareholder’s stock had gone into free fall before most of them could make a decent exit. The share slew down from Rs. 179 – Rs 18, wiping out more than Rs. 10,000 crore of the investor wealth in the space of the day.
Now who says that only ministers are corrupt and the poor victims of wealth’s racket and scam, even our private enterprises are not reliable, then whom the common could or should rely on.
It was one of the shameful marks on
Now the question is arising whether Satyam computers, one of the biggest company would survive or overcome with this catastrophic situation and look out of its 53,000 employees or not?
Satyam Computers is the Enron of India. Like Enron, Satyam was one of the biggest and most feted companies. Like Enron, Satyam perpetrated a balance-sheet scam with the support of supposedly world-class auditors. Like Enron, Satyam stands exposed as a gigantic fraud, and faces lawsuits galore.
Yet, while Enron deserved to die, Satyam deserves to be rescued. The best way to achieve this is for the government to ask NR Narayana Murthy, former chief of Infosys, to take over as the CEO of Satyam. He is almost the only person with the capacity and credibility to rescue the company from its current plight.
Enron was a loss-making company that hid its losses until they could be hidden no more. However, Satyam is profitable. Even while confessing to cooking the books, promoter Ramalinga Raju said that Satyam’s profits in the last quarter were not Rs 649 crore but Rs 61 crore. But the industry admitted that Satyam’s actually profit must be high, though Raju was able to plunder and used it large wealth in his son’s company.
Why it is hard to rescue, one of the profit making gems, of the country?
First, no other company will dream of making a takeover bid until Satyam’s true assets and liabilities are established, and that may take some time.
Second, its creditors are going to shut off funds, and its debtors will probably delay payments due, starving it of cash to pay salaries.
Third, many staffers see no future in Satyam and are desperately trying to find other jobs. Customers, too, will seek to migrate from the tainted company.
For these reasons, no takeover bid looks likely, even as time runs out for the company. The government has the power to appoint new directors, but if it appoints bureaucrats — as it has done in mismanaged companies in the past — these will carry no credibility with either investors or customers. So, customers, creditors and employees will continue to flee, and company will be destroyed.
Some analysts think that the company can be saved if the government guarantees new bank credit to Satyam. That will enable the company to pay salaries till such time as the company’s books are fully investigated. Other analysts think the company can be taken over by the government and broken into smaller pieces for sale. However, Satyam’s problems are so deep that the company looks like collapsing, so there might soon be nothing left to be broken up and sold in pieces.
That is why the company needs a new chief with an unimpeachable reputation for integrity. The company needs not just a new board but also a new management.
Satyam needs Narayana Murthy or Premji as CEO. Premji is not available, since he is already running Wipro. . But Murthy retired as CEO of Infosys many years ago, and is now its mentor and ambassador at large. That is an important and valuable role. But rescuing Satyam would be a bigger and more fruitful role.
Most of the analysts say that rescuing Satyam is a wasteful task, as already it has lost so many of its fortune and its gems like employees. But I believe it should be save, because it is a ship of large profit, and meanwhile if we save it from sinking, many employees will be prevent from any tragedy happen in their families and their lives and in the interim a large amount of business will be lost.
It is better to hunt a tiger, before escalating any other harm…
Best of luck Satyam …
MOHAMMED FARHAN KHAN...