Mr Sleaze & Co.

There is a sinister attempt to save the skin of the Satyam fraud kingpin by vested interests in the corporate and political establishment

Sanjay Kapoor

IN SOME WAYS Satyam's promoter Ramalinga Raju's decision to own up malfeasance in running his company is seriously surprising. And there is a reason. After failing to convince the Satyam board to buy out the infrastructural companies  of his sons, Maytas Infra and Maytas Properties for $1.2 billion, Raju would not  have given himself up and owned up his monumental fraud if he had not been assured of protection as well as the promise to retain his considerable fortunes.

If the past conduct of the Centre and state government is anything to go by, they  would not have allowed the blow out of Satyam as it has the potential to take down  with itself not only colossal funds of the politicians and other high net individuals  (HNIs), but also the country's glittering image as the investment destination for all  those who believed in the exotic India story.

This does not mean that the government did not know the machinations of some IT companies and how they were making money. But they just did not want to do anything that looked like shooting oneself on the foot. The big question is: can the government allow the fudging of accounts, fraud and other accounting manipulations to build a particular sector? Foreign funds were in reality lured into IT due to inflated valuation by multi-national banks and accounting firms like Pricewaterhouse Coopers (PWC). This differently layered reality prevents us to completely comprehend who benefits by how much in constructing this complex Potemkin. It is an enterprise that facilitates, besides promoters and bureaucrats, members of the political class to first, park their funds, and later, multiply it to fund their elections, which are becoming increasingly expensive.

Government agencies like the Income Tax Department (ITD) know about what the big IT companies have been up to. The ITD has owned up that they knew about Satyam's jugglery. Hardnews reported in its August 2006 issue in an article titled, ‘Big Boys Rule OK', about another big IT company (not Satyam) that had been showing increased business to improve valuations in order to beef up its stock prices. This is what we wrote in 2006 about a case that dates back to 2001: