The ‘Satyam’ saga has turned out to be far away from ‘Satya’. The moral of the story is 'riding the tiger and getting eaten too'. Confessional statement by Ramalinga Raju has sent shock waves through the entire investor community. Raju's story seems to be half truth only, there's more to it than meets the eye. It is the story of a CEO trying to become a landlord and a politician overnight. Raju seems to have swindled Satyam shareholder's money to buy land for his family members and to bribe the politicians to fulfill his evil design.
Whatever has happened is history, law of the land will take its due course in the time to come. However, the new board of Satyam has a task cut out before them, in order to restore the confidence of vendors, shareholders and employees of the beleaguered company. Here is what they need to do swiftly:
1. Initiate criminal proceedings against Raju, to recover the swindled money. Try to get the accounts and assets of the Raju's freezed by enforcement agencies.
2. Recast the balance sheet, by hiring an independent firm, to instill confidence in the stakeholders.
3. No company will be able to takeover Satyam at this juncture due to the takeover code. Invite interested parties like L&T, M&M to nominate members on the board to lend it a semblance of legitimacy.
4. Take immediate steps to cut costs to keep the company as a going concern. Convince all employees to accept a 25% wage cut for the next 6 months at least. The directors should take the lead by announcing a 50% cut in their own remuneration. Manage efficient management of premises, rent out some space from company owned premises. The survival of the company is the main issue.
This issue is much bigger than a mere 'Corporate Governance' issue, as the image of India as a nation is at stake. Of course, it is bad news for the investors, as this may have laid the foundation of a prolonged bear phase ahead!
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