Satyam – Should we believe the story?

Satyam – Should we believe the story?

First time I am posting something on the satyam fraud case. My only concern in post is the willingness of the peoples to believe a liar’s confession blindly. In my opinion the fact that a person admits to have been lying for several years is reason to suspect that what is put forward as the new truth might just be a new lie. What makes me more suspicious is that the “confession” actually paints the most benign picture possible. What the Satyam Chairman is saying that he never siphoned any money from the company. While many people suspected that Satyam profits were diverted to group companies, the former chairman is saying that the profits were never there. He is also trying to paint the Maytas deal as a last ditch attempt to save Satyam instead of the other way around.

My question is why we should believe all this. How credible is the claim that an IT business with a blue chip client list was not profitable? How credible is the attempt to exonerate everybody else? Should we consider the possibility that the problems were in other group companies of the promoters and that Satyam lost everything while trying to bail them out?


Raju has alleged that none of the board members past or present were aware of the real situation
against the book of accounts. What has left me astounded is how could the elite independent directors be caught unawares of the scam being going around for the last several years? Were they mere spectators obliging to Raju? Doesn’t it seem like a white lie?

In summary:
1) Today, Satyam has a vacuum at the top. The promoters are gone; and the independent directors who would normally take charge in a situation like this have no credibility left.

2) Satyam is a large company with global visibility and global clients. These clients would expect that they would continue to be serviced.

3) Even if Satyam is to be sold, somebody has to run the sale.
In the next few days, if nothing is done, both clients and employees would leave in droves and there would be nothing to sell.


I think that now satyam require government intervention to investigate the case

Still few questions are revolving into my mind:
At least one skeleton is out of the cupboard. But what about others companies whose books of accounts have been "nicely" prepared and "beautifully" presented by the "esteemed" auditors? What about those who spruce up valuations before IPOs? And what’s the culpability of the auditors who are hands in glove with the corporate who play truant with respect to corporate governance principles?