Lead me from the Unreal to the real.

This is the darkest hour in the history of Corporate India.The shocking revelations of Shri Ramalinga Raju send a chill down every spine. Thereis no creative accounting, no aggressive policies, no book adjustments, but abig time fraud which has been going on for several years. If we come to thinkof it this the fraud would have commenced around the time immediately afterEnron scandal which rocked the corporate world. It is shocking to see that theCompany of great repute at that time would get into fraud immediately after thelearning of the Enron Scandal.

In a lighter vein theBalance Sheet is often referred to as the Corporate Bikini. What is revealed isinteresting, but what is hidden is much more exciting.

As usual let’s start by first blaming the auditors. How isit at all possible to fake cash balances? Much has been spoken aboutoverstatement of debtors, understatement of liabilities, recording fictitiousrevenue, recording revenue from asset sale, fictitious financing and so on andso forth. But fictitious cash is quite an eye opener and beyond comprehensioneven for highly mismanaged Companies. In addition to the degradation ofCorporate Governance there also seems to be a serious issues with Human Conscienceand ethics. I do not believe that the auditors have any defense out here andwould need to bear the brunt. Clearly the professionals here are not deliveringand deserve the boot. But the heart goes to the millions of professionals whodo their job diligently but will now be placed under the scanner.

Secondly, a fraud of this magnitude is not possible withoutcollusion with a number of finance executives of the Company. It is again surprisingto see that there was no whistle blower all these years. Corporate integrityappears to be lost in the wilderness of greed and power. India clearly needs tohave laws enacted to encourage whistle blowers

Third, what did the management and the Board refrain fromexercising the normal due diligence. Have the auditors not informed the Boardof the mismanagement. It is not possible to believe that the Board was not awareof any of the fraudulent transactions all along.

The financial Tsunami unleashed in the Global markets istypically the time when many such frauds will come to light. There areCompanies who try to overcome tough phases with some creative accounting andwindow dressing, but quickly revert as the tides change to their favour. But toget creative at the time when the economy was booming was absolutely uncalledfor and unnecessary.  There can be no plausibleexplanation for this behavior

Pride and glory are being sought for at all costs. Enronscandal was more about money. But this case it goes much beyond money. A lothad been spoken about Satyam getting pursuing money by undercutting from theother major giants and interestingly Satyam had been singled out with thischarge. It is important for customers to understand that they need to go beyondsaving a few bucks and evaluate long term benefits.

Now as we hope that is an isolated case and non pervasive, weneed to awaken to the facts which put pressure on executives to behave in this manner.There should be continuous reinforcement of ethical behavior on the part ofmanagement and the CEOs. The rest of the Corporates out there should clean uptheir books of all the irregularities before reaching the levels of Satyam. Getoff the tiger and fight it rather than postpone the inevitable.

There are terrorists who kill and there are corporates whomake life difficult to live. At this hour I cannot help but pray..

asato ma sadgamaya
tamaso ma jyotirgamaya
mrtyorma amrtam gamaya

Lead me from the unreal to the real.
Lead me from darkness to light.
Lead me from death to immortality.