Fix the Raju within!
I still remember that day. It was January 11, 2009. It was this day of January in 1966,
when India’s second Prime Minister Lal Bahadur Shastri died in Tashkent after suffering a cardiac arrest. Shastri – a man known for his honesty and simplicity.
The irony could not be lost as 33 years later, on the very same day the confessions of Satyam’s ill fated chief Raju hogged the limelight.
As Ramalinga Raju kept revealing secrets, not just corporate but the whole of India was stunned. In a single moment, India Inc’s success story had been busted, with fingers being pointed at some of the pioneering companies.
It might be interesting when one reads the letter of resignation that Raju offered to the Satyam board. He claimed that he never made a single rupee out of the thousands of crores he managed to fake in the balance sheet.
So what prompted Raju to do all this? Was it ego? Or was it a mixture of greed and ego, which prompted the disgraced chief to fake balance sheets and to risk the future of thousands of employees?
Economies are facing a crisis the world over. India, for that matter is no exception. But what I want to say is not just about the economic slowdown or Satyam chief’s great fall.
A Harvard degree and a thesis in corporate governance failed to make him overcome greed.
Raju’s case is not unique or an isolated one. A close look at the global recession story will throw up many such examples.
Infact, way back in 1857, Charles Dickens in his novel <i>Liitle Dorrit</i> described about a scheme which warned about fake investments and ‘circulation of none existing money’ and how the modern day system would be inadequate to face the menace. Dickens’ suspicion or say, worst fears came true in the year 1920 AD when an Italian called Charles Ponzi dazzled investors with high returns and lured them into fraud investments.
Ponzi, an ordinary man, lured investors in America, many of whom had borrowed loans against their credit ratings to invest, and turned into a millionaire within 6 months. Ponzi used to offer 50% returns in 45 days on the money invested and used the money procured from new investment to pay the returns on the existing customers.
His main transaction- buying International Reply Coupons (IRC’s) abroad at cheap rates and then exchange them for US Postal stamps, which in turn would give him 400% profit margin at the time of sell out.
A brilliant scheme superficially, but Ponzi knew he was preparing a golden trap for himself and without making the actual money. The bubble had to burst someday. And it did.
Boston Post carried series of articles on the frauds and soon it was all over for Ponzi and his ‘Ponzi-schemes.’
So it’s all the more surprising that Ramalinga Raju did not know about Ponzi. Of course he did, but failed to learn. People like Bernard Madoff (who took a sheet from Ponzi’s experience and eventually got implicated in the Madoff investment scandal), Harshad Mehta, Ketan Parekh, the JVG group are examples that there are different Rajus running operations all across the globe and will remain till the world exists.
The whole business of making quick money, even if one has to indulge in murky dealings, has led to a situation where the world which was once flowing with surplus cash, foreign reserves and boasted of double digit GDP growth figures is suddenly facing a credit crisis.
A crisis to an extent that banks, which were once a symbol of capitalistic pride and excellence, turned bankrupt overnight.
Many thinkers and economists have taken different stances on describing this common crisis affecting the globe, some called it ‘near recession,’ few termed it ‘meltdown’ or things like ‘global credit crunch’, but one thing is for sure, that one reason remains the same for all and that there is a Raju hidden somewhere within all of us.
And the one solution, which I think the economists, the world over would agree is:
Simply fix the ‘Raju’ within! And to do that, it would require our leadership to practice what Lal Bahadur Shastri stood for. The world needs to go back to the mantra of honesty and simplicity.
comments powered by Disqus
- WATCH HIGHLIGHTS: Real Madrid vs Atletico Madrid - UEFA Champions League final
- Daniel Craig 'exhausted' from playing James Bond
- Narendra Modi government failed to create jobs, aid agriculture: Congress
- Daniel Craig 'exhausted' from playing James Bond says Judi Dench
- Give education, equality to girl child, urges Amitabh Bachchan