By M H Ahssan
How dare he?" asked an irate lady I met late last week. "He has more than 50000 employees, several times more shareholders, and there was the prestige not just of his company, but also this country at stake. How dare he?''
This is a difficult query to answer because more than financial irregularities, it also explores the human psyche and condition. At some stage (or several, perhaps) during the past decade, B Ramalinga Raju would also have asked himself precisely this question. Should he dare pull off such a scam and risk everything he had spent in the years building Satyam? It is doubtful that he could have done what he did without trepidation. But then, there are few greater temptations than avarice and sadly, even less reasons a human being gives him or herself not to succumb to it.
The first time would be painful and difficult, but subsequently the fear is replaced by the thrill of not being found out, then the confidence that if it can be done a few times it can be done several times over, and finally the reassuring delusion that if it can be done so many times, it is also reversible and nobody is the wiser. Alas, when the truth dawns it is almost always too late.
Yet, Satyam's collapse is not only about a greedy individual, or a company's board of directors, but symptomatic also of systemic and societal ignorance and apathy. It seems farfetched that regulatory bodies were not even in the know, if not in actual connivance, of what had been happening in the company for so many years. Add to these political favours sought and given and the contours of a nefarious rigmarole become sharper. Add further the lionisation of so-called wealth creators by the lay public and (particularly) the media without checking their bonafides regularly, and there emerges an inevitability about such a crisis.
Wealth creation can be a virtue, but people in business are subject to the same tugs and pressures of temptations and greed as in all other walks of life. A CEO of a company I met the other day said that the top man in a company had to be paid the top dollar for his integrity as much as his competence.
The Satyam case is a grim reminder of what happens if only one of the two attributes is met.
An email I received from England last week sent me hurtling back three decades. I recall reading something similar when I was in college too. Since it has great relevance today, what with recession haunting our lives, I am reproducing it in toto -- with due apologies to those who may have read it then or now:
Socialism: You have two cows. The State nationalises one and gives it to your neighbour.
Communism: You have two cows. The State takes both and gives you some milk.
Fascism: You have two cows. The State takes both and sells you some milk.
Traditional Capitalism: You have two cows. You sell one and buy a bull. Your herd multiplies and the economy grows. You sell them and retire on the income.
Lehman Brothers Venture Capitalism: You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at Bear Sterns, then execute a debt-equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all the seven cows to your listed company. The annual report says the company owns eight cows, with an option on one more. You sell one cow to buy a new president of the United States, leaving with you nine cows. No balance sheet provided with the release. The public then buys your bull. Clearly, the more things change the more they remain the same.
And finally, apropos Sanjay Dutt's desire to take his Munnabhai reel role into real life, and the Samajwadi Party's decision to give him a ticket for the next elections, I don't know whether to cry or laugh.
Looked at every which way, this appears to be a very cruel joke.
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