Satyam fiasco - An opportunity for AP government

(I wrote this on 9 Jan 2009, on another Blog)
Satyam - Pride of Hyderabad
Satyam has been the pride of Andhra Pradesh for over one and half decade. Andhrites have boasted of their IT power by way of Satyam. It has been the benchmark of their success in the IT Industry and has almost become a household name.

All the successive AP governments have been lauding the founder chairman Rama Linga Raju for developing an IT company which went on to become the 4th biggest in the country. The government is so fascinated by this man that they have even entrusted him with several big non IT projects too which are related to construction and real estate etc. (MAYTAS).

The irresponsible state Political Leaders
When the news broke out regarding the fiasco the state government disowned him instantly and at the same time did not bother to arrest him. That in any case nobody understands. But the government was not even talking anything about the company, its employee’s job security, shareholders woes etc. Instead all the political leaders started the blame game and indulged in mud-slinging on each other.
No leader even talked about devising some plan to rescue the company and the families of more than 53,000 employees, most of them being Andhrites.

Response from the Central government
Central government has taken a very bold and commendable decision of taking the responsibility and salvaging the company by appointing highly qualified and competent personnel as the board members. The greats in IT (Kiran Karnik), Financial (Ketan Prekh) and Legal (Achutan) aspects have been roped in to do the job, initially. This move sends a very strong and right signal to the world that India is committed to good corporate governance and always takes the responsibility of all the stake holders of the company in the event of any fraud or malpractice etc.

The result
In all likelihood, with the help of new board members there will be some damage control exercise done to Satyam which might lead to any of the following:
 The company might get on track and the business will be as usual
 The board might throw the doors open for other companies for smooth takeover
 There might be still chaos in the company and may loose its sheen and business
 The clientele list might still go down or the business might not grow
 Still feeling the insecurity there might be employee exodus
 The company might be broken into several strategic parts and run independently or sold to different companies and so on.

What has AP or Hyderabad to gain?
Whatever be the outcome of the Satyam’s new board’s initiative does AP or Hyderabad has anything to benefit? In all likelihood it is Hyderabad which will be on the loosing end.
If it is taken over by companies like L&T or Tech Mahindra etc. the company might no longer be a Hyderabadi company.
If it is run by the new board members, where none of them are from AP or Telugu then we may not boast Satyam as an Andhra company.
If it is not run properly leading to employee exodus or client list coming down then Hyderabad may loose the tag of housing 4th biggest IT Company in India etc.
If none of them happens and Satyam runs and grows as it has been doing previously then it would be really great.

Is it Satyam’s disgrace or Hyderabad’s disgrace?
Though it is a disgrace for Satyam but at the same time Hyderabad also is likely to bear the brunt. Because, Satyam may have been founded and run by somebody, but Hyderabadis have been treating it is their baby. They have been boasting of their Andhra IT power by way of Satyam.

Hence Hyderabadis cannot afford to loose the tag of being the 4th biggest IT Company or the supremacy Hyderabad has in IT field. The state government should have been the first to jump into action. It should have chalked out a plan, at least an interim one which would initially put the company back on track. The plan could have been similar to the one Central government has taken. They could have requested people with successful IT career and clean image like Mr.Narayan Murthy of Infosys to step in etc.

But this has not happened, thanks to our visionless and inefficient political leaders. They have no clue that the very name Telugu is also dented. They did not even get a thought that they should somehow salvage the company and restore Satyam or the Hyderabad glory and show to the world that AP government is committed to provide a good platform for all the IT companies and in the event of any problem it is there to help. A good opportunity to prove that AP is the right destination for Investment or setting up more IT companies is missed and hence an opportunity to restore the credibility is lost.