The confessions of Mr Ramalinga Raju, Chairman of Satyam Computer Services, that he is guilty of cooking the company’s books to the tune of over Rs 7,000 crore amount to a huge fraud, perpetrated not just on the company’s hapless shareholders. The ramifications of his actions extend well beyond, to that of the country’s information technology industry, whose credibility as a responsible service provider has been severely dented by the actions of the chair man of a company that has until now been regarded as the sector’s fourth largest domestic player. A rogue promoter has brought shame to Corporate India and, indeed, the nation of a billion strong people, many of whom count nothing more than integrity as their most prized possession. It is ironic that when the company announced plans to acquire two companies in the real estate and construction sectors, it was seen as a potential bail-out by a healthy Satyam of two struggling promoter-funded companies. It now transpires that the former itself is sick and in urgent need of treatment.

While the management has much to answer for, no less guilty is the auditing profession and the chartered accountant who certified the accounts as representing a true and fair view of the state of affairs. The latter, in particular, even if not involved personally in this elaborate conspiracy to defraud the public, was at least guilty of professional negligence of an order that is nothing short of criminal. It is incredible that management claims of having bank balances of nearly Rs 4,000 crore (the figure as of March 2008) was accepted at face value and the accounts certified as accurate. Far too long has the chartered accountants body, when confronted with corporate crimes of the most egregious nature, repeated ad nauseam that the auditing profession is only a ‘watchdog’ of investor interests and not a ‘bloodhound’. This has fostered, among its members, a culture of acquiescence to corporate depredations in their mad scramble for professional fees and market share. There is simply far too much at stake for the Government to dismiss the Satyam episode as yet another example of the excesses of free market capitalism and say that the law will take its natural course. The country is positioned on the threshold of a period of robust economic growth. It needs the full confidence of investors both domestic and foreign. Customers abroad must have full faith in the local systems and legal processes. India should be sensitive to the losses suffered by overseas investors. It should allow the processes in those countries to take their course, and abide by their outcome. Anything less would lead to India Inc suffering from a crisis of confidence among global investors and consumers alike.

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