Raju’s fraud has seriously dented India Inc.’s image
We do want to match America in many aspects, but surely corporate scandals don’t belong to that list. Unfortunately, Ramalinga Raju, Chairman of Satyam brought India to the hall of shame this year itself when he admitted to cooking up account books of the company. He is now in prison for claiming non-existent assets to the tune of a staggering $1.6 billion. As Hitesh Agrawal, Head-Research, Angel Broking, points out, “The biggest dent that this Satyam episode has created is in the ‘trust’ factor of investors towards companies, auditors, reported numbers by companies, et al, which is an element that cannot be written in black and white, but is a practice that has to be diligently followed.” One lesson that we draw from Satyam episode is that formal corporate governance recognition in Indian IT industry in reality relies on ticking check boxes. Tech Mahindra (the IT arm of Anand Mahindra Group) has now picked the fraud stricken IT giant at Rs.28.89 billion. And Raju has lost all that he built in so many years by bowing to selfish personal interests.
We do want to match America in many aspects, but surely corporate scandals don’t belong to that list. Unfortunately, Ramalinga Raju, Chairman of Satyam brought India to the hall of shame this year itself when he admitted to cooking up account books of the company. He is now in prison for claiming non-existent assets to the tune of a staggering $1.6 billion. As Hitesh Agrawal, Head-Research, Angel Broking, points out, “The biggest dent that this Satyam episode has created is in the ‘trust’ factor of investors towards companies, auditors, reported numbers by companies, et al, which is an element that cannot be written in black and white, but is a practice that has to be diligently followed.” One lesson that we draw from Satyam episode is that formal corporate governance recognition in Indian IT industry in reality relies on ticking check boxes. Tech Mahindra (the IT arm of Anand Mahindra Group) has now picked the fraud stricken IT giant at Rs.28.89 billion. And Raju has lost all that he built in so many years by bowing to selfish personal interests.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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