One of India’s largest IT companies, the Hyderabad headquartered Satyam, described as a Global IT company has recently been in the news for the wrong reasons. Some days ago, there was a flap in corporate circles when it was announced that the Chairman, Ramalinga Raju wanted Satyam to invest $ 1.6 billion in two companies (Maytas) owned by his sons.
Crossword aficionados ( or fans , for short) will immediately spot that Maytas is Satyam spelt backwards.
Many felt that this was a compromise on corporate governance as these companies are in the business of infrastructure development, quite different from Satyam’s stated core competence area. The Satyam ADR fell by as much as 56 % in New York as a result of the outcry.
This comes after an event in October with far reaching consequences. Satyam was banned by the World Bank from carrying out off shore development for this prestigious organization due to alleged breaches in security.
More recently questions are being asked about the role of independent directors. Satyam had some very famous names in their Board: Vinod Dham, founder of the Pentium chip; Prof. Krishna Palepu of Harvard and Prof. Ram Mohan Rao, Director of the Indian School of Business. These gentlemen have since resigned but what do all these events say about the role of independent dierectors.
Independent Directors are supposed to safeguard the interests of minority shareholders and ensure high standards of corporate governance. It is reported that companies like Infosys pay Rs. 5-7 million per year to their independent directors. A far cry from an era where they got a paltry Rs. 200 per Board Meeting with the inevitable tea and biscuits.
Wouldn’t it be fair to say that they are paid more since more is expected of them?
People at Work & Play 
Requesting all the Software guys to express your view on joining or working with Satyam?
Currenlty 70% of the voters say they trust Raju and willing to work in Satyam. Do you also?
Participate in the poll after reading the Facts about Satyam – India’s No. 4 software services exporter
Dear Sir,
Regarding Satyam issue there is a big question which comes to our mind that are Indian corporates are truly honest or not ,do they really follow the corporate ethics.
It took Mr.Raju to make Satyam long 24 years , he built the organization brick by brick, but one single mistake can be proved to be fatal.
Corporate India has to take lot of lesson from this, they shoud not make this mistake any more, FIIs will turnaround their face, and it is a face loss for all
Indian corporates.S&P give poor rating for all the IT firms , when we say IT firms are jewel in India’s business success.
Insider trading , over invoicing, account manipulations are very common practice amongst all Indian corporates.
One advice :Learn from the mistake.
With Warm Regards.
A public company should be handled like a public company no matter what ever the stake and sweat of the founders be in it.
It is surprising to see how such a one sided thought processes went on which has such a negative impact on the flip side.
This is a big let down on the part of top management.
We go by the policy of “One bit of rice is enough to tell the quality of entire broth”. So they fumbled in this litmus test and need to bear the consequences.
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