January 11, 2009

 

Government's involvement will hasten Satyam's fall

I am somewhat equivocal about Govt's decision to dismiss current board and put a new one.

Now, this action can be justified by the fact that the current management team declaring complete oblivion of the events at the company, which is difficult to believe, to put it mildly. And the marquee Independent directors on board have also washed off their hands from the issue. With the issue of this magnitude, Govt cannot sit on sidelines as a mute spectator as thousands of employees can potentially be severely affected. To put this in context, do recall Govt's involvement when the troubled Jet Airways tried to get rid of 1900 employees.

But Govt's involvement doesn't really help the situation. Now think about Satyam's customer who rely on Satyam to deliver on their critical work for continuity of THEIR own business. How confident will they be when they will know that the company is run by some representatives, I suppose they will be pretty good ones, who don't have idea about the customers. If Satyam's customers were wary after the incident came to light, I suppose, panic will be the the natural emotion now. And when customers run away, what business will there be?

A classic Zugzwang situation - no matter what you do, you lose.

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A spoof on the Satyam saga:
http://videos.ibibo.com/videos/viewvideo/rahul/189191
 
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