Satyamev Jayate

Like for many others it is astounding for me that something of this magnitude
went undetected and nobody blew the whistle earlier. And that includes insiders,
outsiders, company watchers, analysts, banks, auditors and media (including this
publication). But is that not true of all financial scandals? ( have a look at
http://projects.exeter.ac.uk/RDavies/arian/scandals/ ). The human capacity to
deceive and be deceived is truly remarkable.

If scams and scandals still persist there have to be more reasons than mere
greed. And there are many.

First is that the risk reward ratio, especially in the present day, is
skewed. The financial, power and recognition related rewards are
disproportionate in a winner takes all world. And therefore the need to be, and
remain a winner, increases in direct proportion. Yes, there is an occasional
derailment, a few get caught and are tried first by the media and then by
judicial bodies. Some of them even get punished. But there are too many others
who are not caught. Surely chief executives, presidents, chairmen, and
politicians are not so nave that they are not aware of the risks. But in their
opinion the risk is worthwhile.

Shyam Malhotra

Then there is the relentless pressure. Whatever else in Rajus confession,
this is real. Ask any leader. The tiger of success and growth is difficult to
mount. It is even more difficult to get off. So they keep riding it from quarter
to quarterwith the hope that things will change. As long as growth remains, it
works. When it stops, the tiger has its fill. So please expect some reruns of
this story with new characters. Andjust to clarifyI have no information about
other Indian companies riding their own tigers.

The script also has many accomplices and cheerleaderswho wittingly or
unwittingly spur the process. Inside the organization there are the silent
acceptors whose careers and/or wealth plans depend on share prices. They have
their own tigers to ride. Outside the company there are those who applaud and
awardwith fake enthusiasmevery step. In each case there is self interest that
turns truth to a casualty. In fact, most times truth is taken at face value and
accepted norms and principles.

There is also the issue of those who judge the wrong-doers. In many cases
these are politicians or bureaucrats. The politicians have their own scams. If
lying to shareholders is bad, lying to the electorate is worse. And politicians
do it with far greater regularity and intensity then corporate leaders. But for
some reason the yardstick for lies, corruption and cheating is different for the
political class. Now Mr Rajuand many others like him with a criminal recordis
not suitable for even a class four job in the Government of India. He can, of
course, become a minister. Bureaucrats have their own axe to grind or their
backs to protect, and do not interfere until inevitable. In this case Maytasthe
infrastructure companywhich is a probable cause of the problem, has received
many large contracts. It would not be unrealistic to imagine political and
bureaucratic involvement. The banks and auditors also have congruent business
interests. And that increases their chances of collusion at the individual or
organizational level.

So even as this story unravels it would be good to remember that these tigers
will not get extinct so easily.

Satyamev Jayate!