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.
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“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!
talked about Tata Chemicals Ltd. (TCL) that has created the buzz. The company announced a big ticket billion dollar mega acquisition of the US-based natural soda ash maker – General Chemicals Industrial Products (GCIP) on January 31. The acquisition (100% stake through a mix of debt & equity) will not only make TCL the 2nd largest soda ash maker in the world, but also help it command over 14% (over 5.5 million tonnes) of the world’s total soda ash capacity. However, it’s the choice of the target that deserves the real applause! Once the acquisition is complete, over 50% of TCL’s capacity would be through the natural route. This means both sustainability and natural hedge against the commodity cycle. “Since GCIP is using trona natural mineral, which can be converted into soda ash and is more cost effective (as production cost of natural soda ash is 40-45% cheaper than the cost of producing synthetic soda), it means increased profitability for TCL”, avers Rohit Nagraj, Sr. Research Analyst, Angel Broking. A Tata Chemicals spokesperson confirmed to B&E that “by 2009 and 2010, we will have more such overseas acquisitions as we believe Tata Chemicals has not yet utilised its full potential”.
workday (watching others slog), the thought of a sunny Jaisalmer trip full of adventure and intriguing cultural revealing was rendering dreamy smirks on my face. The 22-hour long journey was tiresome on occasions when I watched the train halt at as many as 40 almost stranded stations and looked at a travel partner whose agenda seemed no less than setting a world record in sleeping the longest (as well as the loudest). But as soon as I stepped at the Jaisalmer station, energy gushed in. Looking at its low-ceiling construction with wonderfully designed pillars, I handed over myself to the royal city. As I turned around, the Punjabi Jat lad seemed to have done the same too, though in a manner typical to him, stretching out wide (and loud) at the very centre of the railway station, in full public view.
presidency. Instead of transforming the economic situation as expected, Unlike his predecessors, he has let the media write & speculate on his personal life.
important, also has been instrumental in generating maximum complexities to the world affairs. Surprisingly, there has also been reluctance in global initiatives and participation, in resolving its conflicts. Though, Mr. Bush has finally succeeded to sponsor Annapolis peace conference in his last year of presidency and has also succeeded in leaving some positive implications. Instances of sympathy, empathy and donations from many donor countries and organisations in the Paris conference, held just after Annapolis conference, are some examples.
kid to people as old as my father goes into the video-gaming room of my hotel and enjoy big time,” says Abhinesh Sikka, a 26-year old software professional working with US-based Trilogy Software Inc. while explaining how gaming is still not very popular in India. Indeed, a typical talk from a GenNext individual who realises the force behind the global gaming industry, which as per PricewaterhouseCoopers (PwC) is forecasted to grow at a Compounded Annual Growth Rate (CAGR) of 9.1%, escalating to $48.9 billion in 2011 from the current $37.5 billion (estimated for FY2007). So is Sikka right about Indians not loving video-games?
subprime monster’s binge won’t make for a continental cuisine will have to check the order once again. Interestingly, European banks, unlike their US counterparts, seem to have eluded themselves to a large extent from being brutally pulverised by the sub-prime mess and have kept the lid on their balance sheets; but then, times will be getting harder by the day.
TV sets or picture frames in a matter of seconds. We already have the technology to capture user created video, convert it into a 3D object and release it into a virtual world. Residents of Second Life do it everyday. In the years to come, we can add interactivity to these objects in such a way that you could virtually touch and feel them. Online shopping could go 3D with buyers walking through virtual stores and picking up items from shelves. The virtual acts of dropping them into the bag and paying at the counter could translate into shopping carts & online credit card payments. Advanced versions of the technology will allow people to attend social gatherings, educational classes, sports events et al, without leaving the comfort of their homes. Whether such events are actually taking place in the real world or are solely artificial creations of the virtual world will be the discretion of the user. 
can translate a fashion design from the Paris Catwalk to the shelves in 15 days. Innovation is the new god!” Myth-exploding arrives next. “Even if one wants to create a predictable brand message over time, one can’t. Why? Because there are over 50 million blogs, 24x7, flashing out messages about brands. These messages are based on customer experience, personal agenda or social rumour, not strategic positioning! Further brand terrorism is a deadly fact, alive and kicking with China being a soft target. The Formalhyde stores battered their Beer brands. The Triclosan gossip savaged their soap and toothpaste sales. Rui Chenggangs’ nationalist blog shut down Starbucks in the Forbidden City.” Finally, in conclusion, he offers that in today’s market-scape, business is the brand and brand is the business. The brand is absorbed, imbued and encompassed in every conceivable experience that the consumer experiences and encounters – and therefore, in effect, every action a company takes.
cutting edge technology, how does RNSSL plan to stay distinctly ahead? “Foreign competition is setting-in in the form of JV’s with local players. But we believe in healthy competition and I suppose there is room for many players,” says R. Narayanan, President, RNSSL. For now, the company is banking on its dependable portfolio of global clients like Honda, Ford, Toyota, Tatas and Maruti Suzuki, but future plans are afoot to invest Rs.20 crore to set up a plant in Singur for supplying parts to Tata’s much hyped ‘Nano’.
mergers and acquisitions (remember the plus-$500 million foreign deals that these giants struck?). That was about two years back. Then came 2007, a period filled with lull and silence and except the R&D (re)search-and-seek game, nothing grand made the headlines in the M&A spirit. It’s 2008 now, and once again comes the crest of activities for the domestic players. And just when we all thought that the pharma kings were following the path tread before (of ‘big-ticket’ acquisitions), something ‘strategically’ interesting has come to surface. Scouting for growth, the industry is turning its back to mega deals when it comes to M&As (even as international players move in for a kill with significant resources), and they have started looking at smaller, strategic acquisitions now.