Confessing fraud in his letter to the board of Satyam, Satyam Computers founder and chairman B. Ramalinga Raju wrote: It was like riding a tiger, not knowing how to get off without being eaten.
The allusion to a tiger in this sentence reminded me of last years Booker prize winning novel, The White Tiger, by Aravind Adiga, a fellow Indian writer. Through his novel as well as author interviews, Adiga postulates that only through two ways can a poor man rise above his rank in Indias current socio-economic system: crime and politics.
How interesting to note that Raju uses the same vehicle of tigera symbol of turbo-charged unstoppable growthto convey what he was dealing with! Juxtapose it with Balram, The White Tiger, the lead character in Adigas novel. The narrative shows the contrast between Indias rise as a modern global economy and the crime-fuelled ambitions of Balram who escapes rural poverty to seek a destiny of riches.
But the relationship between the real Raju and the fictional Balram ends here. Unlike Balram, Raju did not exactly come from a poor family. After his father migrated to the state capital Hyderabad from his ancestral village Garagaparru, he started buying land in the city. Raju was sent to Ohio in the US to study business. He came back to help his father in the construction business. Raju grew the business, achieved great success, finally diversifying into textiles and even softwarenow he was firmly saddled on the tiger. Tax holidays and Indias outsourcing boom helped Satyam, that was started with 20 employees in 1987, to become Indias fourth largest outsourcer.
But Raju was not happy with the number four status. He wanted to be number one. And that desire to become the numero uno in his fieldby hook or by crookcaused his ultimate downfall.
Getting off the tiger
Now in police custody, Raju is no fool. Despite what he says, he surely knew how to get off the tiger and save his life. He had already done what he had to dosiphoning off millions of dollars into scores of benami (secret) accounts. Says a report in The Outlook, the suspicion from day one has been that Raju probably owned up to inflating accounts as the punishment for this is significantly less than that for siphoning funds.
The report claims that perhaps it was the sub-prime crisis and its indirect impact on the Indian real estate market that forced Raju to get off the tiger. Raju must have been rotating funds from Satyam to his construction firm (Maytas) hoping that he would plow them back after he had earned the profits from the real estate boom. When the boom turned into a bust, the game was over for Raju. (Rotation of funds refers to the practice of illegally moving funds from, say, Business A and investing it in Business B. Once the investment in Business B turns profitable, the original money is quietly put back in Business A.The Outlook)
Clannish, feudal and also dynastic
As many reports and investigations into his past reveal, Raju wanted immense success and respect. With Satyam's success, Ramalinga Raju started taking his status as an icon seriously, but was very unhappy that he wasnt spoken of in the same breath as Narayana Murthy (of Infosys) and Azim Premji (of Wipro), writes Sugata Srinivasaraju in Andhras Very Own in The Outlook. He also made a serious effort to intellectually elevate himself to the level of the bigboys of the IT industry, says Sugata.
Writing of Rajus nature, after talking to his friends and relatives, Sugata concludes: …However seemingly modern and multinational Satyam became since the 1990s, some primitive qualities never left him and his company. They say he was somewhat clannish, feudal and also dynastic. Qualities that one usually identifies with agrarian Andhra Pradesh. They point out that he was an inveterate gambler of sorts with a deep sense of destiny. They also describe him as an 'aimless entrepreneur' who dabbled in different, disparate ventures before he chanced upon fame through the IT industry in the 1990s. Since there was no central vision to his entrepreneurial journey, they believe, Ramalinga Raju mixed his old economy, license raj habits with the spirit of the new to create a heady cocktail that ultimately brought him down.
His work of charity through the Byrraju Foundation in his ancestral village can perhaps also be seen in the same lightfeeding his primitive ideas of clannish clout and dynastic rule. According to a report in The Hindustan Times, most residents of Garagaparru and other coastal villages in the Bhimavaram blockabout 400 km southeast of Hyderabaddo not understand Rajus crime. Nor do they want to. Were supporting him because hes a nice man, said Prasad Raju, a 26-year-old electrician who works in Hyderabad and was in his native village for Sankranti. He has done a lot for us. Because of him we now have safe drinking water. We dont have walk to Bhimavaram for medicines. Ambulances are a call away.
A white tiger?
Is Raju then a white tiger, a rare creature in a shining new corporate India which is otherwise pristine, full of honest business leaders, unadulterated with the wheelers, dealers and fixers of the license raj era?
Pathetic levels of probity in public life, absence of an ounce of corporate transparency and widespread bureaucratic malfeasance are components of much that is Indian society today, says columnist and business editor Dilip Cherian in Tehelka. Yet, to point out that we are today largely venal verges on the unpatriotic, and is sacrilegious. But just last year, India was ranked a lowly 74 among 180 countries of the world on the worldwide Corruption Perceptions Index. Enough said.
Veteran Indian journalist and commentator M. J. Akbar mourns the lack of character (ethics) in todays business leaders. Character was a moral asset that combined honesty and loyalty to a fellow citizen or comrade-soldier, he says. It is a reflection of contemporary morality that we have changed the meaning of the word. Today a character is either a chap with a tic in his metabolism, or a role in fiction, film or television. From a truth, character has changed to artifice.
Akbar says that the fraud at Satyam is not a mere economic offence. It is also a political offence, he says in his blog. Satyam is a Hyderabad story. Crooks who steal shareholders blind cannot do so without political patronage. Bankerssome of whose hypocrisy is matched only by their pomposityhand out huge amounts in the full knowledge that the money is going to be stolen by promoters they cozy up to. The kickbacks are substantial, because the first principle of dacoity is that there has to be equitable (if not equal) distribution of the spoils. The slicing order of the stolen cake is this: company promoter takes the biggest chunk, politician gets the second bite, and banker nibbles at the third. Akbar goes on to give examples of many businesses in Andhra Pradesh where thuggery is rife.
Chartered accountant turned filmmaker Shekhar Kapur (of Elizabeth fame) concludes in his blog: Satyam is Indias sub-prime crisis, and the effects will be long and painful as the corruption in the system is unravelled. It will reach the highest echelons of our corporate world, for Raju could not have perpetrated this fraud at this level and for so long, alone. It needed the collusion of the banks, the accountants, and the government. And I would bet that he knows that he will be let off lightly as the investigations will be somehow stopped before it engulfs the whole system.
Shekhars last sentence says it all. The system might let Raju escape with light punishment. Yet we know that justice that fails to restore whats lost is little justice at all.
Along with justice, equally important is the issue of ethics. And if ethics are a function of incentives, must the system not throw away its toxic incentives?
Thats the question we all need to ponder.
Zafar Anjum is the online editor of MIS Asia portal.
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