Thursday, January 11, 2018

Throwback to the Satyam scandal

 

Remember 2009 ? Me vaguely. This was when smartphones were still only for the filthily rich, in countries with very high wireless speeds, orkut was the facebook of the time, and flipkart still sold only books. The tech industry in India was hit by a huge scandal that year. One of the more prestigious software services firm revealed that they have been cooking their account books for years, and was actually in massive loss. The Satyam scam was at the same time shocking and unbelievable, because the company had a rags to riches story and aleady has branches in many foreign countries and hundreds of clients. And I think it was also shameful, because the name ‘Satyam’ in hindi/telugu/(insert any south Indian language here) means ‘Truth’. Talk of punctured balloons.

I remember the day when the scam was revealed, mostly by SMSes and rapidly forwarded e-mails. Most of the engineers on the floor I think did not see the seriousness of the scandal, and were actually looking for a way to cash in on this in the stock market. You see, when the truth about the scandal was made public, shareholders began dumping Satyam stocks. Like garbage. People on my floor (looking at you, Ankit !) had plans to buy Satyam shares when I hit rock bottom, confident that the issue would be resolved in a few days and would pick up soon. Time enough to make some money !

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Remember , this was all happening during the last recession. Engineers employed by Satyam began looking for jobs frantically, flooding jobsites with their resumes. Most were even willing to take a paycut just to move to a better job. Some took drastic steps. Even today people are hesitant to admit they worked for Satyam.

Anyway, I divert. The big question everyone was asking how come such a huge financial scam was hiddden. Surely there were multiple people in a co-ordinated cover up. Satyam’s books were audited by the …ahem…prestigious PriceWaterCoopers. Apparently they were auditing only the physical books the Chairman had specially cooked for them, instead of actually double checking with the banks.

Had this been any other country, the courts would have dealt out something in a matter of few days. Maximum a few months. But nobody is in a hurry in India. The court battles began running marathons, and justice was delayed. This week, more than 9 years after the scam, Indian courts have banned PriceWater from auditing any listed Indian company for two years, effectively affecting their direct revenue. This was in addition to who knows all the fines they will be charged.

The Securities and Exchange Board of India (SEBI) has barred Price Waterhouse from auditing any listed company in India for a period of two years for its alleged role in the Satyam scam.The regulator had also directed the auditing firm to disgorge 13.09 crore along with 12% interest per annum since January 2009.In 2010, SEBI issued a show-cause notice to Price Waterhouse, among many other entities, after it emerged that the accounts of Satyam were falsified and inflated.

I was thanking my good fortune. When I was a fresh graduate looking for an IT job, I had attended a Satyam job fair in Kochin, Kerala, a few years prior. I had cleared all the rounds and was rejected by their HR-asshole in the last moment. Some of my juniors got through though. Had they selected me, I would have taken the offer and stayed employed with them in 2009, when all hell broke loose.

PWC had a nice run all these years. Meanwhile the chairman was pronounced guilty only in 2015, and Satyam was taken over by Mahindra’s software division in 2012.

When I joined there a few years ago in Bangalore, I could notice the older Satyam logo at multiple places in the campus. An old logo on a building was removed but grafitti remained. On stickers on old furniture and computer systems.

Its a scandalous past everybody just wants to forget. But the cases will still continue in Indian courts…