By Savreen Gadhoke
“It was like riding a tiger, not knowing how to get off without being eaten,” said 57-year-old Ramalinga Raju, Chairman, Satyam Computers, as he confessed his involvement in the Rs.78 billion corporate scam earlier this month. Touted as the biggest corporate scandal in the history of India Inc., experts are drawing imitable similarities with the 2001 fraud case of Enron. Enron, world’s premiere energy resource company, before Chapter 11-ing itself, was charged with accounting frauds of inflating balance sheet figures, and that too in the midst of the US economic slowdown. Circa 2009: Satyam was found in a similar situation of aggrandising company’s books, and that too at a time when the entire nation is struggling with the slowdown. Various assets (both tangible & non-tangible) are at stake: the future of around 53,000 Satyam employees, shareholder’s wealth, the repute of financial watchdogs such as SEBI and the image of India Inc. on the world map. And as the nation was still trying to digest the realities of Satyam fiasco, news came that World Bank has banned Wipro Technologies from doing business with it for the next four years. And as if that was not enough, Infosys Technologies has been charged with a Rs.33 crore service tax evasion charge. Seems like the curtain is slowly rising on the wrong-doings of Indian IT sector. While Raju has relieved himself of the burden of truth and cleared his conscience, he has, in the bargain, soiled the picture of corporate India across the globe. Has the exposure of the Satyam corporate scam tainted Brand India Inc.?
“Yes”, asserts eminent economist, Lord Meghnad Desai, “the unveiling of the corporate scandal at Satyam has cast a bad image of India Inc. on the world map.” And the consequences of the scam are for all to see: following the disclosure, losses to the tune of $2 billion were accounted by stocks of Indian companies listed on NYSE. Professes Van Jackson, Senior Strategy Consultant and a Foreign Policy analyst, “India Inc. is a victim of poor timing… Scandals never reflect well on associated national economies but the timing of the Satyam discovery makes it more damaging than a typical scandal of this magnitude.” It took almost two decades for the likes of Wipro, TCS, HCL Technologies & Infosys to carve a niche for themselves on the world IT map and just one corporate scandal may finish all that.
Avers Brian Moriarty, Associate Director for Communications, Business Roundtable Institute for Corporate Ethics, “This is a serious case of fraud… Value destroying behaviours such as fraud and corruption respect no borders.” More importantly, if other Indian companies are tainted with similar scandals in the short-term, this could damage investor trust and public trust more broadly. A fraud of this magnitude not only serves as a good excuse for companies to look elsewhere for their outsourcing needs but also speaks volumes of the practice of corporate governance exercised by not only the Indian IT sector, but entire India Inc.
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Source : IIPM Editorial, 2009
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
1500-plus IIPM students placed across the country with 44 bagging international offers
IIPM set to beat economic slowdown
IIPM Admission Detail
IIPM Programme :- SUPERIOR COURSE CONTENTS
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
Why Study Abroad When IIPM Gives You 3 global Advantages!
“It was like riding a tiger, not knowing how to get off without being eaten,” said 57-year-old Ramalinga Raju, Chairman, Satyam Computers, as he confessed his involvement in the Rs.78 billion corporate scam earlier this month. Touted as the biggest corporate scandal in the history of India Inc., experts are drawing imitable similarities with the 2001 fraud case of Enron. Enron, world’s premiere energy resource company, before Chapter 11-ing itself, was charged with accounting frauds of inflating balance sheet figures, and that too in the midst of the US economic slowdown. Circa 2009: Satyam was found in a similar situation of aggrandising company’s books, and that too at a time when the entire nation is struggling with the slowdown. Various assets (both tangible & non-tangible) are at stake: the future of around 53,000 Satyam employees, shareholder’s wealth, the repute of financial watchdogs such as SEBI and the image of India Inc. on the world map. And as the nation was still trying to digest the realities of Satyam fiasco, news came that World Bank has banned Wipro Technologies from doing business with it for the next four years. And as if that was not enough, Infosys Technologies has been charged with a Rs.33 crore service tax evasion charge. Seems like the curtain is slowly rising on the wrong-doings of Indian IT sector. While Raju has relieved himself of the burden of truth and cleared his conscience, he has, in the bargain, soiled the picture of corporate India across the globe. Has the exposure of the Satyam corporate scam tainted Brand India Inc.?
“Yes”, asserts eminent economist, Lord Meghnad Desai, “the unveiling of the corporate scandal at Satyam has cast a bad image of India Inc. on the world map.” And the consequences of the scam are for all to see: following the disclosure, losses to the tune of $2 billion were accounted by stocks of Indian companies listed on NYSE. Professes Van Jackson, Senior Strategy Consultant and a Foreign Policy analyst, “India Inc. is a victim of poor timing… Scandals never reflect well on associated national economies but the timing of the Satyam discovery makes it more damaging than a typical scandal of this magnitude.” It took almost two decades for the likes of Wipro, TCS, HCL Technologies & Infosys to carve a niche for themselves on the world IT map and just one corporate scandal may finish all that.
Avers Brian Moriarty, Associate Director for Communications, Business Roundtable Institute for Corporate Ethics, “This is a serious case of fraud… Value destroying behaviours such as fraud and corruption respect no borders.” More importantly, if other Indian companies are tainted with similar scandals in the short-term, this could damage investor trust and public trust more broadly. A fraud of this magnitude not only serves as a good excuse for companies to look elsewhere for their outsourcing needs but also speaks volumes of the practice of corporate governance exercised by not only the Indian IT sector, but entire India Inc.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2009
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
1500-plus IIPM students placed across the country with 44 bagging international offers
IIPM set to beat economic slowdown
IIPM Admission Detail
IIPM Programme :- SUPERIOR COURSE CONTENTS
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
Why Study Abroad When IIPM Gives You 3 global Advantages!
