Thursday, January 8, 2009

Skeletons in the Closet

Hello friends. Welcome to a brand new year. As we start this year, I wish you all the prosperity and good luck.

Well, I had plans of blogging something else. But as Oscar Wilde put it "The only way to get rid of a temptation is to yield to it" ,I yielded to my temptations writing about the Satyam sham (I use the word sham because "Breaking news", "scandal", "Fraud" had already been used by most of TV channels , newspapers and the India Inc) . By now everyone would be overdose with news about Satyam . But I am sorry I can’t help but write about it and its your fate to read this :-)

At the outset it was a really sad day for India Inc. The entire episode took everyone by surprise. It is being compared to the likes of Enron and WorldCom. And rightly so. The entire Satyam episode had been like a jigsaw puzzle. As the story unfolded following the confessions of Mr. Ramalinga Raju, everything seemed to fall in its right place (as of now). Dunno if we can still believe Mr. Raju (Check Here)

Going by the facts put by Mr. Raju,

5040 crores of non-existent cash
376 crores of non-existent interest accrued
1230 crores of liability arranged by Mr. Raju in his own capacity
490 crores of overstated debtors position

This adds up to 7136 crores. Now come to the Maytas deal. The whole company was valued at $1.6 Billion . When we convert 7136 crores in terms of dollars, it comes around $1.6 Billion. This is the exact amount missing from Satyam's accounts. Since this cash did not exist in Satyam's books and since the acquisition of Maytas could be done for nothing , it all made perfect sense. It was a tragic end to a thrilling story which otherwise would have ended on a happy note if it wasn’t for the villains (In the form of Investors and shareholders in Mr. Raju's opinion).

What would have happened had Satyam went ahead with Maytas Deal? I can’t imagine what would have happened but I guess the catastrophe would have been of a lesser degree. Thank God it didn’t happen. Else we wouldn’t have known the real truth (Satyam) behind it.

One good thing is he came out in the public and admitted his guilt rather than waiting for someone to find it. All these days he had been dancing with the skeletons in his closet. I am sure he would be a relieved man and would have had a better sleep last night. Unfortunately robbed sleep of many others.

But my heart goes out for all the 53000+ employees of Satyam who have toiled for years and now face this for no fault of theirs. I wish the Satyam Employees all the strength to bear all these shocks.

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