Democracy in the Dock

A few weeks ago, Michelle Obama, the former first lady of the US, made a powerful analogy while on her “When we all vote” campaign tour: “You wouldn’t let your grandma decide what you should wear… you wouldn’t take advice from a stranger on which doctor to consult”. But when you don’t vote, she argued, you are essentially letting others decide far more important consequences for your life than what you will be wearing. India, on the other hand, is currently debating an even more contentious topic. When we vote, aren’t we entrusting our futures with criminals?

India’s election trends have long showed an unmasked preference for goons. 34% of our current Members of Parliament have pending criminal cases against them. Over 20%, serious criminal charges, such as murder and rape. As The Economist put it a few years ago, “One can just about walk the whole way from Mumbai to Kolkata without stepping foot outside a constituency who’s MP isn’t facing a charge”. 

It wasn’t just that criminals were entering politics. They were also more likely to win. The average criminal with a heinous crime had an 18% likelihood of winning, while the untainted was successful just 6% of the time. Moreover, these shares have been rapidly increasing with every successive election.

And yet, while deciding on a Public Interest Litigation last month, the Supreme Court refused to ban chargesheeted accused from standing for office, or even impose a narrower restriction on political parties from fielding such candidates (Convicted felons, like Lalu Prasad Yadav, are already barred for a period). The decision is correct, legally. After all, the definition of ‘disqualified’ in the Representation of People Act, 1951, makes it abundantly clear that only the restrictions in the Act can act as a disability ‘and (on) no other ground’. For the Court to then legislate a fresh disqualification would be an unwelcome enlargement of its own powers.

The apex Court rightly found that it is squarely and solely within the powers of the legislature to amend the law to ensure that criminals do not run our politics. And thus, we get perhaps the closest parallel to ‘entrusting the keys with the thief’. Parliament has an increasing share of members with serious criminal cases against them. Parties realise that such candidates have a bigger chance of winning votes, and actively court them. And these very parties are supposed to pass laws to keep such candidates out. Just not happening!

Milan Vaishnav, a senior associate at the Carnegie Endowment for International Peace in Washington has spent many summers studying the phenomenon of criminalisation of Indian politics. Its result, a brilliant book “When Crime Pays”, is a must read (the above statistics are from the book). He traces four reasons why political parties gravitate towards criminals. First, he says candidates with criminal records may be involved in illegal activity which provides them with ample liquid resources. 
Second, candidates with criminal reputations also tend to carry their own vote-banks, by virtue of being ‘native-sons’. This also helps them accumulate resources through local networks that leverage their power. Thirdly, this local-network provides them with a volunteer base that is essential to a short and intense campaign. Finally, it is plausible to assume that such a person would be willing to cut corners with the law, allowing them to raise significant funds through illicit means.

What follows is that for political parties, such candidates offer economic rents, in the form of being self-sufficient, financially and electorally, and often being able to carry neighbouring constituencies in their wake. Vaishnav’s travels through India told him that freebies to voters are no longer viewed as bribery. Since almost every serious candidate hands out doles, voters see it as an entitlement, and for the candidate, it becomes essential for simply staying in the game. Former Election Commissioner Navin B Chawla, writing in the Indian Express says, “it is no longer a one-way process. Voters have become accustomed to demanding their price”.

With caps on permissible spending by candidates, the freebies cannot be legally ‘spent’. Enter unaccounted money. But there are other roles too. Such as funding Paid news (where newspapers slip favourable mentions in their regular reportage to paying candidates, for a price) as well as a daily supply of liquor and food, in addition to cash, to volunteers/workers to keep them motivated. [It is easy to see that election is not a poor man’s cup of tea. Vaishnav’s analysis of asset-declarations show that candidates with less than Rs 10 lakhs in wealth have a 1% chance of winning, and candidates with less than Rs 1 crore in assets have a mere 10% chance of winning]

And therein lies the rub. The malice is, perhaps, not just that criminals run our Parliament. Our plight is that we have made such a mockery of our democracy that only the criminals can compete for our votes effectively.

One For The Infidels

Mumbai had surely asked for more. The one thing that could have made the night perfect, even magical for an overtly partisan crowd got snubbed early in the Indian innings. For a world cup victory fashioned by a century from the bat of Sachin Tendulkar was the ultimate treat. It was not to be. But in a way, it was just as well.

A Sachin & Sehwag powered victory would have been more befitting the 90s. This young team we were cheering for yesterday was anything but that. And yet, the funereal atmosphere in the crowd after the exit of the maestro was deafening. It gave away the fact that the famed average Indian fan was still not convinced of this change. Amir Khan & Nita Ambani could well have been accompanying a hearse. For an entire country, it was as though Good Friday had turned up three weeks early, and that too, on a Saturday!

But for this Indian team, a circle was being completed. A circle that began to be penciled even before 2003. It actually began with a world cup victory a couple of years before that.

Even while the country was mourning cricket’s loss of credibility in the match fixing scandal of the late 90s, and India was shown to be its epicentre, an Indian team, comprising of players below the age of 19, and led by a lanky UP boy Mohammad Kaif brought home the Youth World Cup. A certain teenager, who answered to the name of Yuvraj Singh was the Man of the Tournament that time. Sounds familiar?

Two years later, one June evening, we switched off our TV sets and went to sleep at bed time, after India were reduced to 145 for 5, chasing 325 in a final against the English at Lords. There was only so much two inexperienced middle order batsman and a five-strong bowling tail could accomplish, we told ourselves.

The late city editions of the next day’s newspapers however had a different story to tell. The two youngsters, Yuvraj and Kaif, had refused to buy that theory and dropped anchor, guiding the team to victory. This wasn’t just another tournament victory. It was an announcement that the Indian cricket team of the new century was a far cry from the whimpering infidels of the 1990s. Captain Saurav Ganguly, if you remember, immortalized that day by taking off his shirt even while standing in the inner sanctum of cricket, the pavillion at Lords. As in-your-face as it could get!

Then in 2003 came that epic run upto the final of the world cup. From an opening that saw the team struggling to beat debutants Holland, and crumbling in front of Australia in their first two matches, India went on to win the next eight matches on the back of sheer mental strength and team work. But at the final frontier, the team caved in against Australia again, after Sachin Tendulkar was dismissed cheaply. It was almost as if we were not willing to believe we were worth it.

And again, on Saturday, an entire country was lulled into silence on that early wicket of Tendulkar. It was déjà vu, after the 2003 experience. Capitulation was imminent. Lasith Malinga celebrated like a footballer who scored a match wining goal. Sri Lanka would have already been seeing their reflections on the winners trophy.

Except that the Men in Blue were all set to prove a point. That matches weren’t lost until they all were beaten. That India never won in the 90s because they were just so willing to embrace failure before it’s due. The infidel had no place in this team. A billion infidels were to be taught the cricketing lesson of their lives.

This Indian team had arrived, and how. Sachin was still making his runs, and perhaps even better than any other time in his career, the records just kept flowing in. But the team was no longer a one-man army.

This world cup victory is made out to be for Sachin Tendulkar. And rightly so. For no one individual has carried on his pair of shoulders the weight of so many sporting dreams for so many years. And no one could have done it the way the great man did. But it was just as well that, on Saturday, India won without the Tendulkar Ton!

The Hand Of Fraud

One image that will linger in the mind long after one of the remaining teams hold the 2010 football world cup aloft next sunday, will be that of Uruguay's prolific striker Luiz Suarez, gleefully sitting on the shoulders of one of his colleagues, being paraded around the ground after his team's infamous quarterfinal victory, call it escape if you will, against Ghana. The once mighty South Americans had had just won a hard fought penalty shootout against the lone African team in the competition, after being outplayed on the field for most of the game in regular and extra time.

Of course this was not an ordinary victory by penalties. Almost everyone who watched the match would agree that Ghana was defrauded of victory. Luis Suarez's hand went where it had no right to go to block what would have been a sure goal, right on the goal line. The misdemenour is magnified by the fact that this was the last shot of the game, and Ghana would have directly hurtled into the semi finals, an unprecedented achievement for the African team, had it gone in.

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In sport, as in real life, cheats come in two forms. Most of them, they just manage to evade the system. They take advantage of the fact that the law has only so many eyes and ears, and that loopholes abound for them to exploit. They're bad enough! But not as bad as the ones who make a mockery of the laws that exist to keep them in check. The ones that look the system in the eye to say that it couldnt thwart their purpose if it wanted to. Uruguay's national hero Luis Suarez happens to be one of them.

He was promptly red carded. That was as much as the existing laws could do to him. So much the pity. He will miss Uruguay's semi final match up. But that can hardly be a trade-off, considering that there wouldnt have been a semi final to miss, if he hadnt acted. Ghana was awarded a penalty kick to compensate for what was the surest of goals, which they missed. The match went into penalty shoot out, and Uruguay won a game they could not have won if they played by the rules.

But of course not everyone sees it as a crime. Take Uruguay's coach Oscar Tabárez for instance. He had the most outrageous argument. "We abide by what the referee did. It could have been a mistake. Yes, he stuck his hand out, but it's not cheating. What else do you want? Is Suárez also to blame for Ghana missing the penalty? We try to be dignified, and if we lose a match, we look for the reasons for it. You shouldn't look to third parties." A-ha. So now the victims should just blame themselves. For not knowing to cheat, or for lack of opportunities to do so?

The culprit himself was much less modest. Luis Suarez now claims the rights to the 'hand of god' goal, reminiscent of that famous goal punched in by Diego Maradona in the 1986 world cup against England. He went on to own up for the incident, saying "There was no alternative but for me to do that, and when they missed the penalty, I thought: it is a miracle and we are alive in the tournament." So thats it; when all legal options expire, Take the not legal one!

Of course, the Uruguayans have a precedent too many in this world cup. Beginning with the 'hand of fraud' goal from someone who has so far been revered as one of the greatest footballers of our times, Thierry Henry, when he handled the ball, twice, before scoring the goal that helped France qualify for the world cup, breaking the hearts of a smart Irish team. Over the last two weeks, several other teams have benefitted from oversight by referees.

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They say that all is fair in war. Sport is in a way war, only a war in which not everything is fair. It is war palyed to rules. And it is those rules that dignify sport, that elevate the imagination of sport lovers, and which let people look at the back pages of newspapers with a brighter smile and not the that glare over the gory details of real wars that litter the pages before, stories of blood and suffering.

Last week, sitting on a discussion panel for one of our news channels, sports commentator Harsha Bhogle agonised that today a certain amount of cheating is taken for granted in sport.

Its all a part of the game, the tough ones argue. As if sport was never a place for the not so tough! But then, how long can the line between whats fair and whats not be allowed to be blurred, for sport to retain its respect, one wonders.

Will Ghana's defeat be the final straw that forces the FIFA to sit down and rethink how rigidly its laws are to be implemented by spirit, and not just by the book? How long will it be before FIFA allows referees to be assisted by technology so that they can overcome understandable human errors? And most importantly, how long before FIFA finds a way of adequately punishing the ones who blatantly violate rules?

Ghana, footballing minnows, surely do not have to strike a penalty to claim a goal that was theirs by right. No, It really does not matter that Ghana had a chance to redeem themselves with the penalty. The moment had passed. Neither is it a valid argument that perhaps Ghana did not deserve to be in the semi's, what with the precious few goals their front-line managed to score in open play all the way to the quarters (which translates into, Ghana could have scored in the 120 minutes before the incident). What matters is that they will be going home, with almost everyone convinced that they were robbed of the chance to make history. What matters is that the legendary olympic motto of 'Faster, Higher, Stronger' can be circumvented, and still games can be won.

In the semi finals of the 2003 cricket world cup, Australian vice captain Adam Gilchrist did something unheard untill then. Early in the match, when he had nicked the ball to a Sri Lankan fielder, he declared himself out and walked back to the pavillion, even though the umpire had not seen the contact between bat and ball. It was heralded as a new era of self censorship that would help clean up sport. But the idea didn't really catch up. Even Gilchrist subsequently stopped 'walking'.

Self censorship just won't work. But that shouldn't stop sporting authorities from stepping in and righting gross wrongs. And righting means righting adequately. Else, the whole purpose of sport would be defeated. God Forbid!

A French Betrayal

On Tuesday before the world cup match against South Africa, French defender William Gallas sang the La Marseilles with gusto. 'Come children of the fatherland, our day of glory has arrived', he sang. Over the next ninety minutes on the pitch, he looked as if he couldn’t care less. In the days leading up to the match, he was one of the fabulous five that led the player revolt against coach Raymond Domenech.

Of the others, Frank Ribery was a shadow of his Bayern Munich self that commands an annual salary of ten million euros. Thierry Henry was struggling to find a place for himself on the scorecard in the little time he got on the field. Nikolas Anelka, France's enfant terrible, was banned for dissent, and the leader of the revolt, and captain of the team, Patrik Evra wasn't even allowed on the field. These five, also happen to be France's best set of players currently. Hardly the formula to win a tournament, wouldn't you think?

But the pity was not to see them struggle in vain to stamp their authority on the pitch. The pity was to see them look as it didn't matter whether they did, in what will perhaps be the last big stage for many of them. Sad it was that they gave up on winning well before their ninety minutes of play were done. Disgusting it was to see them forget that even if not for themselves, they owed it to the French fans and to football in general, to not take the chance to wear the national jersey at the highest stage lightly.

And to think that a lot of us mentioned France among possible winners barely two weeks ago. But a top billing takes you only so far. Being favourites is not the same as winning. Ultimately its something from within that brings the cup to the lip. Like Vince Lombardi, that legendary American rugby coach used to tell his wards, 'winning is not everything, the will to win is everything'.

Roger Federer is at his menacing best when he is a set down. He rarely loses an important match in straight sets. Brazil has never failed to qualify for the second round in a world cup for 44 years. If they did, they'd probably be massacred back home, you never know. The only tournament the Australian cricket team has lost in recent years is the T20 world cups, a format they still don’t seem to have adjusted to.

But for France, faced with the prospect of yet another humiliating exit, they looked more disoriented than ever. The sight of Djibrael Cisse, shaking his head and walking away from the scene of Joann Djorkoff's red card, shaking his head would exemplify the emotion that a football pitch would be the last place most of the team would rather be that day.

France was a team that always belied reputations. They followed up their 3rd placed finish in the 1986 Mexico world cup with no shows in the next two editions. They failed to qualify in spite of having all time greats like Eric Cantona and Papin in their ranks. In 1998, when they returned to the world cup finals, they took home the crown. Four years later, another first round exit, and humiliation, playing with a team that was too overage for modern day sport. Then in 2006, France made the finals, losing to Italy only in a penalty shootout. And finally, now in 2010, another ignominous defeat.

Is it just inconsistency, or is there more? You can't put the blame on 'out of form' players. Olympique Lyon, French domestic champions had a heady run in the European Champions League last season, reaching the semi final in May with a squad that makes up almost half the numbers of the national squad. And in any case, they were against South Africa, which boasts of not more than one one world class player.

It couldnt be bad coaching either. It was the same coach that took them all the way to the finals last time around. It was surely not the austerity drive back home. The French team has had one of the best facilities among all the teams in South Africa this month.

Discipline is something champions seem to be born with. Well, actually, Discipline is just what separates the champions from the 'insanely talented but perennial under achievers'. Discipline is the difference between Pele, with his 3 world cup titles and over a thousand goals, and Diego Maradona, whose accomplishments cannot hold a candle to the extent of his genius. Discipline is what brings Italy consistently to football glory, in spite of never being a fancied contender.

And a ludicrous lack of discipline is what did France in, with players taking up the cudgels against their own coach, even refusing to turn up for training. Nikolas Anelka might have been right, but that doesn’t justify his behaviour.

If the French are still confused about how to tackle a coach they can’t adjust with, they only need to look across the Atlantic. Diego Maradona might have been the most reviled of coaches last year, notwithstanding his footballing prowess. But over the last few months, both coach and team stepped down from their pedestals, tried to understand each other, and worked for the common good. Today Argentina is the most convincing of the 32 teams playing, if not the only one.

But even discipline can't make up for the lack of inspiration. And for France, they lost when they decided that everything was going against them this time, and they wouldn’t win anyway. But look through the annals of sport, and you will find legendary stories of teams and individuals who fought to the finish just because they couldn’t accept defeat, and eventually won. Again,’ like Lombardi said, It isn’t about winning. It’s about aching to win!

Rating The Yuan

Four years ago, US senator Charles E Schumer made a trip to China to persuade lawmakers there to allow their currency, the Renminbi, popularly known as the Yuan, to fluctuate according to the market. China yielded, and in the next two years, it appreciated fifteen percent against the dollar. That time around, he had warned China of a tariff of 27.5% on Chinese imports until China adjusted the value of its currency.

Fast forward two years. In the height of the financial crisis in July 2008, with the dollar losing value, China again pegged the Yuan to the dollar to prevent its exporters from losing out on conversion. For perspective, China has a 4:1 export import ratio with the US, and singularly contributes to over 40% of its total trade deficit of around $43 billion.

Schumer is now pushing legislation that would designate China as a currency manipulator, with punitive measures to follow. In his words, “They simply want to increase their economic power and we will do whatever it takes to do that. And the only way to change them is by forcing them to change”

But he was just echoing popular sentiment. Nobel Laureate Paul Krugman called for a 25% tax on Chinese imports to America saying “never before in history has a nation followed this drastic a mercantilist policy”. The New York Times, in an editorial this week, called on other countries, such as India and Korea, also affected by China's exhange rate regime, to pressurise the country to let the Yuan to appreciate. This is based on the logic that a weak Yuan making exports of these countries uncompetitive, by allowing Chinese exporters to sell at lower dollar prices as they were getting a higher price out of conversion. (India, on its part, has chosen to remain largely silent on the issue)

But the US is severely affected, or atleast it claims to be. The reasoning is worth paying attention to. America’s trade deficit with China (the excess of its imports over its exports to China, in dollars) stands close to $20 billion. If you apply the appreciation of the currency of another country that has a similar exports to GDP ration, lets say Korea, (the Korean Won has appreciated by 23% in the one year leading upto January 2010 - the period for which we have the latest available trade figures) to the Yuan, it can be said to be undervalued by at least twenty percent. Apply this to the deficit and you’ll find that it could have been lesser by $4 billion (20% of $20 bn), a whopping 10% of America’s total deficit.

But not everyone seems to buy the argument. For example, some bloggers wonder why, in that case, one should not assume that China might also not allow free capital account convertibility. If that were to happen, they argue, the demand for dollars in China from people looking to park some of their assets abroad would actually depreciate the Yuan. James McGregor a senior counselor at Apco Worldwide had yet another point when he spoke to Bloomberg last week saying, “it (the argument) is nicely packaged to solve America's trade deficit problem, but talking decontrol it will only make China reluctant to make a change”.

And that leaves us with yet another argument. Would any purpose be served by cajoling China every other day? With its lately acquired status as an economic powerhouse that weathered the financial crisis, China is in no mood to bow, or atleast be seen as bowing, to international pressure. And here’s the catch. With commodity prices soaring, the country may be able to provide respite to importers by making the Yuan more valuable. So it might actually be in China's interest to appreciate the Yuan now.

In The Mood For Carols

For a country traditionally known for its brain power and whiz kids, and where almost all talk of appreciation of cultural heritage remains nostalgic rhetoric, it is perhaps natural that we Indians are satisfied with, why even applaud, a work of mediocrity branded as art! And so it comes as a pleasant surprise when someone comes along and shows themselves to be capable of matching the best in the world, and that at a form of art that evolved in and was mastered by the west.

To count the Paranjoti Academy Chorus as among the best in the country would not be an exaggeration. The choir has thrilled audiences with a repertoire that cuts across genres for over fifty years. The choir boasts ten international tours and several competitive prizes.

In a Christmas season that even took them to the Rashtrapati Bhavan to herald yuletide for the President of India, they also performed a series of four concerts in the churches of Mumbai. I attended three, and would gladly have gone for more had they obliged.

The concerts were by themselves an assortion of musical genres, a mixture of the some of the best pieces from Medieval Western classical to Indian melodies and European traditionals to modern day carols, any day guaranteed to perk up your senses. The concerts began with the choristers taking the stage in a candlelit procession, singing Silent Night (in itself a rarity – Silent Night is traditionally a closing song)

There are some choral pieces that readily evoke mental images of the Kings College Choir or the Vienna Boys Choir simply because it is almost inconceivable that anyone else could fill you with the same awe on performing them. It gives credence to the reputation of this Indian choir that not only did they attempt ‘O Magnum Mysterium’ & Cantata Domino’, but that their rendition could compare with the best in the world after, but of course, allowing for the shortcomings in live performances.

But the best moments of the concerts were the two Indian songs they performed, ‘Madhura Madhura’ in Marathi & a lullaby in Hindi, aptly titled ‘So Jaa Re’. Indian choral music might be one of the most under-rated if not unheard of traditions of music. Reminds me of the Tamilian composer Cooling Raja, absurd name though, who made some of the most beautiful Christmas music that ever greeted the ear. And don’t even get me started on Malayalam music.

There cannot be Christmas singing without the East European traditionals. Again a distinct stamp of beauty, the carols follow in the rich tradition of the all time greats. The choir did one German (that evergreen ode to the christmas tree, ‘O Tannenbaum’) & two Austrian pieces, plus a couple of Spanish numbers, each of them as pleasant as the other, but with its own unique touch.

But for all the talk of tradition, you cannot miss out on the music that audiences readily connect to. And quite rightly, the best cheers were reserved for the lively rendering of popular carols ‘Deck the Hall’ & ‘The Little Drummer Boy’, Not to mention two contemporary carols by William Dawson, one them which even had tinges of what you could pass of as rap music. (Okay, fancy a bunch a fifteen men singing rap, and you’ll realize why I didn’t call it rap per se). And then there were the congregational hymns, where the whole church joined in singing some of the most popular carols – That was an experience to cherish, a token of appreciation for an evening of splendid music.

The concerts finally closed with two of perhaps the most sought after songs in choral tradition. ‘For Unto Us A Child Is Born’ & finally the majestic ‘Hallelujah’ chorus (which still gives me Goosebumps every time I hear it, never mind that Iv heard it hundreds of times) from George Frideric Handel’s magnum opus ‘Messiah’. Admittedly, the quality of these two renditions failed to match the lofty standards the choir had signed for with its performance earlier in the day, but that is perhaps just nitpicking over an otherwise wonderful evening.

Somehow western choral music, even for its popularity among select pockets of music fans, remains an exclusive genre, even derided by Hindusthani experts as singing in ‘mostly false voice’. But what shouldn’t miss is the collective harmony produced when a multitude of trained voices combine to produce a soulful performance, like the Paranjoti Choir did this Christmas, that cannot be replicated in any other form of music. Whether you agree or not, the next time you rush to a music store to grab a recording of the Choir Of The Kings College, or The Mormon Tabernacle Choir, maybe you should bother to find out when this choir is performing right in your city. It will be worth it, I can guarantee you!

The Dot Con Cornered

Maybe from now on, we can look at company names for clues. Satyam, named after truth, it turns out was just conjuring for us some fanciful numbers every quarter for years now, trying to pass it off for the truth. In a recent, though relatively tame, ponzi scam in Kerala, the perpetrator, a 21 year old lad called Sabari Nath, called his company ‘Total4you’. It was obviously intended to be ‘Total4me’ and ended up being ‘Total4noone’ when he ended up behind bars. You will remember that the big bull of the last decade, Harshad Mehta, called his company GrowMore Research and Asset Management Company Ltd. It grew in infamy.

Not that it is going to help us in reality. Not that we have much of a choice either. If Satyam can happen to us, then God bless us poor investors. Mind you, we are not talking about a fly-by-night company floated by a cunning entrepreneur looking to make a fast buck. No, B.Ramalinga Raju was one of the celebrated faces of the Indian IT industry. Why, a few years ago, the Financial Post, a Canadian publication, suggested that he might be feared in America even more than Osama Bin Laden for the potential threat his business was to the jobs of American citizens.

And why did he do it? Raju was not a Bernard Madoff whose very intention was to defraud the hand that fed him. Atleast, I believe he wasn’t. His undoing was in his willingness to resort to exaggeration in his company’s financials in his eagerness to assure the financial world that all was well with his company. The mild exaggeration, which everyone suspects happens anyway in corporate window-dressing, became acute when just to keep up the façade he had to consistently overstate his profits, ending up with a little less than Rs.7000 crores of fictitious assets. Of course, that gap was intended to be rectified soon. Only thing his business never improved sufficiently to allow him the leeway to do so. In the end his predicament could not be summed up better than he himself did in his confessional letter. “It was like riding a tiger, not knowing how to get off without being eaten”. He continued to ride, till he was thrown off by the tiger itself. The clout which helped him call the shots so far finally deserted him. You can say he was cornered by his misdeeds. So let us examine them.

The first straw was the aborted move in December to acquire two other family owned companies, Maytas Constructions and Maytas Properties, a deal that was at that time unanimously approved by Satyam’s ‘independent’ directors. An uprising of shareholder activism on an unprecedented scale, coupled with the media frenzy put paid to that idea and the deal was called off within the day. Realty companies have been under the scanner for some time now. With liquidity drying up, property prices plummeting and just about everybody predicting doom for the sector, it was but natural that its promoter come up with ideas to bail out the twosome. No one, not even one soul, guessed that it was the parent company that needed bailing out. After all, wasn’t it supposed to be sitting on upwards of 5000 crore’s of rupees in cash? It was unimaginable that the whole exercise was designed so as to give some amount of credence to its Balance Sheet that was attaining humungous proportions in pretension.

When sorrows come, they come not as single spies, but in battalions. Or so Shakespeare mused centuries ago. The next straw was the World Bank ban on outsourcing to the company in a totally unrelated matter, pertaining to briberies made to bank employee’s years ago. While it might not have actually contributed to the revelations of this week, it sure did contribute to the notoriety of the management in the eyes of the public.

And then came the takeover rumours. Having all but forfeited investor trust, it was but inevitable that they be seen as exploring strategic options to enhance value. Merrill Lynch, the firm appointed to advise the company in this regard, would have refused to fall in line with the management’s intention of covering up its own tracks, and when they served their notice of termination of engagement citing irregularities, Ramalinga Raju and his partner in crime, his brother Rama Raju, was left to face the music.

The frightening part is that had one of these elements actually blinked, either the company’s investors or the media that whipped up a fuss, or Merrill Lynch at the time of Due Diligence, (Remember, PriceWaterhouse Coopers, the biggest of the big 4 of accounting firms was hoodwinked into not verifying some 5000 crores worth of bank balance for God knows how long) we might never have even known. But the tiger would not be tamed this time.

Mr Raju is probably consoling his family that he finally did come clean about the whole episode. That he tried his best to steer the ship like a man and only gave up when it became totally out of hand. Maybe he’s patting himself in the back for not defecting or killing himself, a route many other failed entrepreneurs have taken. He seemed to have been doing us all a favour with his generous gesture of submitting to ‘the law of the land’. But wait, who is he kidding?

Two years ago, in February 2007, his company unceremoniously sacked about 1000 employees overnight. The charge – Fake CVs and documents used to gain entry. While that indeed was a crime, doesn’t that pale in comparison with appearing on national television every three months to announce and answer questions relating to another quarter of sterling results that were simply fabricated? If faking was a crime what is his defence for waxing eloquent about corporate governance history and Golden peacocks to assure his own employees knowing full well that his covert actions were anything but straightforward? Or is ‘ethics’ and ‘honesty’ no more than rhetoric to keep cynics at bay?

Maybe some of you would hail him as a warrior who fought till the end. But to me, Ramalinga Raju is just a fraudster!



By the time you would read this, you would have heard various hypotheses in the news about the extent and methods of this scam. So, first of all, I must say that this was written when the scam originally broke out, using the first facts available and my primary reading of the episode. Regarding the stories that I’v been reading in the papers, some are valid. But most of the theories are plain absurd. But let me explain why I think so.

Take for example the accusation that a whole lot of people in the management would surely have known about it. But take my word, if even a few more actually did, we wouldn’t have had this scam. There are two reasons I bring in support of my point.
One, even though the nature of fraud was serious, the items are covered are not. All it takes to repress cash balance would be a banker’s tacit misrepresentation and the bribery/bullying of the auditor in charge. Its easier because cash being the easiest item to verify, the junior most staff are assigned by the auditor to verify the same. And 22 year old kids can be easily hoodwinked. Secondly, the involvement of directors needs to be analysed. Typically the accounts are finalised by the audit committee, (consisting of financially literate members of the board and the different auditors, and the committee would really not take it upon them to verify the veracity of cash balance. I mean, it’s the easiest thing to accept, an audited bank balance number) The audit committee the forwards the recommendations to the Board of Directors who usually pass it without much ado, considering that it has already been analysed.

Even more ridiculous is the suggestion that the company could not have been working on a margin of 3% (thereby implying that the management siphoned out money). While it is a possibility, it is still not prima facie evidence. The reason is simple. All through the year, export based companies have been losing revenue to exchange rate fluctuations. Implying that a company could have done pretty well, but due to an adverse currency bet, they could have a major chunk of that shaved away. During March to September, the movement was so unexpected that a company with the wrong hedging strategy could have got knifed. In fact, just last September the very same journalists were speculating that a few mid sized IT companies might go out of business if the wild fluctuations persist. Of course, blame it on the pressures of sleaze reporting, but does it cost much to think before you put ink to paper?

About Raju’s claims that he never took a penny of the company’s money, here’s how you should read it. Let’s say you were a guest at someone’s home and used there telephone lavishly. While you say goodbye, would you just leave a message saying that ‘hey, I haven’t stolen any of your money, but Iv raked up quite a huge bill on your telephone, please pay it”. And while I don’t have the figures, My memory tells me that Ramalinga Raju and his brother were among the highest paid Indian managers. So basically he was paying himself all that when he didn’t have profits to show?

Finally, Udayan Mukherjee on CNBC TV18 was wondering aloud about the actually existence of Satyam’s 53000 employees. Well, no one has paraded them so as to be sure, but I would rather believe that they exist. The catch is in the fact that them employees themselves must have been a part of a window dressing exercise to tell the world that all was rosy. Like, I know a few fresher’s at Satyam. And virtually all of them have spent their first year surfing the net for lack of projects. Now Iv been crying hoarse about it for the last one year at my old office. Why all your new hirees spend their first year on the bench if your business was improving as per your claims? Either they changed the laws of probability, or something was fishy. Now we know why! And this is precisely why I believe that in spite of al the rhetoric, Satyam will have to retrench a good part of their employees. They don’t enough business to justify its workforce.