Mumbai 26/11; Cricket and Comedy Circus

It is now almost 2 months that Mumbai was invaded by a bunch of Pakistani citizens. The response of India till date has been creating diplomatic pressure on Pakistan and that has yielded nothing concrete as of yet and I do not expect Pakistan to give in to any of India's demand post 11/26.

India has asked countries like Germany not to sell arms and ammunition to Pakistan because of their role in state sponsored terrorism. In this gloom doom economic scenario will the arms producing countries refrain from selling arms to Pakistan is anybody's guess.

It is common knowledge that every human will protest if their source of income is curtailed. There are hundreds of Pakistani's who are earning millions of rupees in India, in fields like acting, playback singing, comedy and not to forget cricket; Adnan Sami, Shakeel Siddiqui, Kashif Mehmood, and the full Pakistani cricket team are few of the examples. These guys come to India with the sole intention of becoming famous and earning megabucks as Pakistan as limited opportunities.

It is my belief when the common Pakistani's cannot earn megabucks in India, they will slowly but surely build pressure on the Government of Pakistan to stop terrorism against India so that they can go back and earn in India.

Though it is my belief that arts/sports do not believe in divisions on the basis of nationality, but at the same time we should not forget that there cannot be friendship between India and Pakistan with a one-sided effort.

Recently, MNS activists and/or Shiv Sainiks had barged in to the shooting of Chinchpokali to China (a sort of sequel to Comedy Circus) and asked Shakeel Siddiqui (a Pakistani standup comedian) to leave Mumbai and the country immediately. Although I DEPLORE most of the actions of the Thackeray cousins, I support this act wholeheartedly.

I think good sense will prevail on the IPL franchise owners to be patriotic towards their country and refrain from taking Pakistani's in their teams (for the second edition of IPL). I would appeal to the Government of India not to issue visas to the Pakistani cricketers to come and play in IPL and ICL.

It is high time that India should at the very least put economic sanctions on Pakistan and stop all cultural activities with that country. Pakistan is attacking India's sovereignty and we as a nation cannot expect USA or UK to come to our rescue. If we do not act, nobody will.

Asatya of Satyam

Satyam Computing Services was founded by B. Ramalinga Raju in 1987. In 1991, Satyam raised money through an IPO and subsequently listed on BSE and NSE. The company offers a variety of IT services and is listed in NYSE, Euronext along with BSE and NSE.

Satyam is headquartered in Hyderabad, Andhra Pradesh, but has offices in 66 countries spanning over 6 continents. Satyam serves 654 global companies among which 185 are Fortune 500 companies. Satyam has roughly 53 thousand staff on its payroll.

Satyam until January 7, 2009 morning was the fourth largest IT Company of India with only TCS, Infosys and Wipro bigger than it.

Satyam was the recipient of Golden Peacock Award for Corporate Governance for the year 2008.

On January 7, 2009, Mr. Raju resigned from the Satyam board after notifying the board of the Directors of Satyam with copies marked to SEBI chairman and the stock exchanges wherein he confessed of fudging the accounts of Satyam and giving false account statements of the company for many previous quarters.

In his letter Mr. Raju confessed that balance sheet carries inflated cash and bank balances of Rs. 5040 crores, an accured interest of 376 crore which is nonexistent, an understated liability of 1230 crore and an overstated debtors position of 490 crore versus. 2651 reflected in the books.
He goes on to say, "What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It has attained unmanageable proportions as the size of company operations grew significantly (annualised revenue run rate of Rs 11,276 crore in the September quarter of 2008 and official reserves of Rs 8,392 crore).
As the promoters held a small percentage of equity, the concern was that poor performance would result in a takeover, thereby exposing the gap. The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones.
It was like riding a tiger, not knowing how to get off without being eaten.”

Within hours of his letter Satyam stock plummeted by as much as 80% and thus wiping out billions of rupees of the investors and thus many investor got eaten by "a tiger" along with Mr. Raju.

Mr. Raju will be remembered not as much as an entrepreneur or a wealth creator but as a wealth destroyer. Around 95% of Indians (maybe less than 5% of India's total population), who have exposure either to mutual funds or unit linked life insurance products or unit linked pension products are indirectly holding Satyam and thus suffered a huge financial loss.

Only the coming days will make it clear how many of the 53 thousand Satyamites will continue to have their job. The Satyamites will just not be losing their job, but also have lost 80% or more of value of their ESOPs.

Recently, World Bank had debarred Satyam from doing any business for 8 years due to data theft. With Barrack Obama and his known anti outsourcing stance becoming the US President within a few weeks, it is to be seen what action he takes on the outsourcing industry given the data theft by Satyam. The other question remains how much profit the IT companies of India are really making given Satyam is making just 3% profit.

The Satyam Fiasco throws a big question mark not only about corporate governance in India but a bigger question remains about the auditing fraternity. It is quite impossible that the auditors could not have detected such huge financial irregularity in the balance sheets for so long a period of time. It is highly likely that they were hand in glove with the management about the issue.

The Satyam crisis has all the ingredients to make it a bigger disaster than it looks now as more skeletons are likely to fall from the cupboard as time goes. If for some reasons Satyam goes the Bear Sterns way, there will be huge losses as more than a lakh of families are dependent on Satyam for their livelihood indirectly (the pool car drivers, security guards, canteen staff, computer maintenance guys, etc.) apart from the 53 thousand who are directly linked. Mr. Raju did what Ajmal Kasab and friends could not do, i.e., hurt India economically, tarnish corporate India's image, drive away investments from India. For me, B. Ramalinga Raju is no less a criminal than Ajmal Kasab and both should be given similar punishment.

If 2008 was bad for the investing community of India 2009 is proving worse. Since the fraud was done by the Fourth Largest IT Company of India, FIIs will think twice before investing back in India.