Disturbing news coming out about the Satyam Scam: the government is going to bail them out by giving them cash. What more is planned, will come out furtively, and will mostly be ignored by the media.
I don't understand why the man who sleeps in the platform should pay good money to these fat cats. When he buys a packet of Biscuit or a sachet of toothpaste, he pays his taxes. And people who play the market are going to get his money. I don't understand this rationale. Because the fat cats dining on champagne in their five star hotels don't even want to look at or speak about the people in the platform. In fact, they drive around with dark screens on the window-panes of their cars. They won't even deign to look at us.
In such a scenario, why should our government, the government which came to power with our votes, which runs on our money, why should we bail out Satyam? Why should we throw good money after bad?
Competitors like Infosys have come out stating that while they won't poach on the employees of Satyam, they would gladly accept their customers. That kind of mean-spiritedness from business houses is typical and inspirational and invigorating. We should learn some lessons from these people who mean business.
I don't think we will lose our IT customers if we let Satyam go where it belongs- what Satyam loses, the others will pick up.
But the case of people who work there is difficult. But it need not be so, if we sit back and think a moment.
What is their problem? Job security? Nationalise Satyam.
Instead of throwing money at Satyam, which shareholders will pick up, and most of it won't come back to government, we should nationalise it hundred percent at cost price, which means, ten rupees per share.
We have a splendid record in that Navartna Public Sector Corporations are doing well. Why not Satyam?
It is a challenge for the new board and its employees. If ONGC, Bharat Petroleum, State Bank of India and so on can make money, I am sure Satyam too will. The benefits will come to all Indians. If US can nationalise banks, why should we not nationalise an IT company? It will be a jewel on the crown of Navaratnas.
Satyam employees will have no grounds to grouch. They have a fat pay- well, not as fat as it could be, but not lean, purse-pinching stuff either. They have job security. They get DA, they get Pension, they get Labour Unions and get to shout. "Workers Unity Zindabad" and walk about in the Main Roads at the Peak Hour. If they feel like it, they can go on fast, or burn an effigy and have a good time while at it (they also get eight days of casual leave, two restricted holidays, thirty days of earned leave, five day week of 40 working hours, with reasonably flexible timings- you can take your time for drinking coffee, having lunch, then drinking tea in the afternoon and so on)
We get Satyam.
How about that?
Well not a great idea but an interesting one given the times. Both bailing out and nationalising Satyam are not acceptable to me.
ReplyDeleteFirst of all I don't know whether Satyam is in deep debt spot that they need a bail out. They inflated profits and assets. On the back of this rosy, faulty, picture Satyam stock rose and benefited promoters and large shareholders. Now that the cat is out investors, especially small and recent, are feeling the pinch. People made money on false information and are now losing money as the real picture emerges. It's a risk embedded in stock transactions and if government starts bailing out investors of all companies that cheat, then our fiscal deficit will be more than our GDP.
Satyam still has lot of good quality assets. They have a good consulting division (erstwhile Satren) and also their employees are as good as you can get in IT. Satyam is not a cheat by birth, acquired bad habits along the way with greed to company. The new board, with Parekh at the helm, should be able to tell us how is Satyam and what the future looks like.
Government may at best direct banks to be considerate to Satyam cause an offers loans with moratorium to tide over the working capital crisis. If Satyam can survive next 12 months then they should be able to run on their own feet.
Satyam is still good enough to be valued as a mid-range IT company. It fell flat trying to stand alongside Infosys and TCS as its true strength could not sustain the market valuation. It was under that pressure to keep the market valuation going Satyam started painting their books rosy without realising it will soon turn red.
"It was under that pressure to keep the market valuation going Satyam started painting their books rosy without realising it will soon turn red."
ReplyDeleteIs that all that the promoters did?
I think they harvested the stock market systematically, they took real money out and put it elsewhere, they showed false figures of people working there and more.
I also find it dusturbing that someone from EMRI a sister-concern of Satyam is in the reconstituted board, how good is that?
I would like to know why nationalising is not a good idea. The employees are the only people suffering here for no mistake of theirs, nationalising will take care of that.
Otherwise people who do business with Satyam can do it elsewhere. In that case, why should Satyam survive?
I don't understand.
Anyway, tax money should not go to them.
If there was money and promoters siphoned it off then the same can be detected via financial reports. If all values in the books are valid then promoters can be accused of stealing company assets. But I guess there was never the amount of money that Satyam claimed to possess.
ReplyDeleteGovernment should focus and perform what is important. Oil is important, defence research is important, but not software and that too not a miniscule company like Satyam. If Satyam is nationalised today, then the pressure will be on the government to nationalise another software company that fails and soon a fmcg and may be a tyre manufacturer and so on. It never ends. Governance should be the focus for the government, not business. 53000 employees is nothing compared to millions of jobs lost in Indian industry in the last one year. In fact most of the people who lost jobs are under or near the poverty line. Should the government do all those business and protect all those jobs? At least Satyam men can find a way out tomorrow if not today.
Deepak Parekh is a highly regarded business leader. He shoule be able to help. Kiran Karnik should bring the IT perspective and the third is Achuthan from SEBI. I haven't heard about the person you are mentioning.
Why should Satyam survive? To help its employees and investors set right their losses. Let's wait for the restated accounts.
I haven't heard about the person you are mentioning.
ReplyDeleteKiran Karnik was a board member of EMRI, another Raju company.
As for the rest of your comments, they deserve a full post.
But I think you still believe Satyam merely manipulated the books, but did not take money out the till. I am at a loss to understand how that can be.
I am want to know what the restated books say till then it's mere speculation. Kiran Karnik may have been an independent director in EMRI, as companies are mandated to keep independent directors on board. He was ex Nasscom executive head. He may not be above the line but Satyam do need someone free from allegiances of other software companies yet a competent hand to provide the IT perspective.
ReplyDelete