Today Satyam Chairman Ramalinga Raju resigned his post and accepted that he has given inflated figures in the balance sheets. This made thousands of employees and share holders in dark. The shares went down to the rock bottom. In US it is down by 90%.
Many don't know what has happened. He has made many illegal transactions to keep the book value high. He has created lot of artificial cash over the past few years and showed inflated profits. This inflated profit slowly grown and at one point it has become unmanageable as the size of company operation grown significantly.
He tried to cover it with the Maytas acquisition and he failed in the process. He tried to cover his fraud with additional fraud. At the end he failed in all his steps.
At the ground level they were having good process and their tracking of performance at the lower level were exceptional. At the same time the middle and upper management was not properly loaded. There were lot of senior level people didn't have responsibility or even not managed projects but were getting more salary. At one point Ramalinga Raju started correcting it in the couple of years.
He also got in to the fame mode and made more crime over the last few years. The first complaint came in 2002 for allegation of improper investments and accounting.
They were barred from World Bank projects for bribing world bank staff in 2005 and is already facing 1 billion fraud case from Upaid.
The fraud issue is going give a big impact on the Indian IT industry. This is going to create Indian IT industry a big set back this year. For Obama, this is a great news and more rules will be applied for Indian outsourcing and this will reduce our growth.
The trust on Indian companies were gone and each and every one of us has to struggle hard to earn respect.
We have thousands of Engineers coming out every year and the slow down will create a big unemployment problem in the next few years.
One good thing will be more engineers will go into their core engineering and the general engineering and the R&D division will get more talented people. This will help us to move to the next level in those areas.
Be bold and be ready to face all the challenges.
We are going to succeed all these and we will grow and become super power in 2020. Yes all these challenges will shape us and all our institutions.
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