In a stark reminder and throwback to the Enron story - Satyam Computers, one of India’s largest (and highly rated) IT services firms, in a stunning disclosure yesterday said that they have been guilty of overstating their financial numbers for the past many years - an amount which is easily in excess of billions of dollars!
In one stroke (and one day) - over 50,000 employees, millions of Satyam shareholders, India’s global reputation, and the sanctity of the whole regulatory mechanism in India (board, auditors, institutional investors, government) stand at the cross-roads today.
It has been a steep fall for Satyam - from sublime to ridiculous.
What makes it more shocking is that the Indian IT services industry (including Satyam) has been the role model/ poster child for corporate governance, ethics, meritocracy and professionalism for entrepreneurs and businesses of all types for over a decade now.
Having been part of the Indian IT industry, personally I am both shocked and angry. But what I find more unsettling is that - just as the ”quantum of blind risk” taken on by the Wall Street Banks surfaced only after the subprime bubble had burst - had the global markets not tanked, no one would have known, bothered, or even cared if there was anything wrong going on at Satyam!
Which means the dictum - “you are not a thief unless you are caught stealing” - continues to drive the ethical/ moral compass for many of us - apparently including the Founders of Satyam.
And that raises an interesting observation - between “what is legally right” and “what is morally right” lies a huge grey area. And businesses (and the decisions they make) usually happen within the boundaries of this grey area…
While we all could easily and objectively agree on ”what is legally right” - but “what is morally right” is far more personal and complex…as what is morally right for you - is perhaps right for you only!
