Satyam: one year later - eNidhi India Travel Blog

Satyam: one year later

Note:-This post is lengthy and can be a bit boring-

Statutory disclaimer: All information/facts used in this post are sourced from public domain. No inside information has been revealed. The analysis, interpretations and opinions expressed herein are very personal to the writer and are done in his individual capacity as a blogger. His former/current/future employers, friends family and others are not a party to this.

Dec 24th-Dec 29 2008: Soon after Tidel Park’s annual all tidel evacuation drill, I left on a 5 day vacation, driving a rented Swift VDi all the way from east coast to west coast (Chennai to Udupi via Bangalore… //admin moderation: force log off self drive topic, redirecting to Satyam)

These were the days when Satyam was facing heat from investor community for its (abandoned) decision to acquire Maytas Infra and Maytas Properties. Many of my relatives and teachers who had invested in Satyam and had suffered a sudden fall in share prices questioned me on this move when I met them and by virtue of me being an employee, blogger and investor, I was expected to offer some explanation as to why such a decision was conceived. Whatever little reasons/justifications I could think of I explained, but largely had to admit I am as clueless as everyone. None of us had a wildest clue on what is in store for us.

About a week later, India’s biggest corporate fraud began to unfold, with Ramalinga Raju’s confession of cooking the books and resignation. As expected all hell broke loose-what happened after that is history. I was tempted to blog about the issue several times, but had to control myself for two reasons-first, as an employee I wasn’t supposed to blog about company matters in public domain, second I was almost as clueless as everyone else, so there wasn’t anything special that I could have shared.

Nevertheless it was an experience worth going through. Satyam had some of the best business continuity measures in place, including a 700 seat BC Center in Singapore with special agreement with Singapore govt and airlines to shift 700 staff without visa and by offloading regular passengers if necessary. However there were no business continuity plans for the possibility of what to do if top management collapses (Even if someone had visualized such as possibility, how will he/she tell the CEO: “dear CEO, in the unfortunate event of you turning fraudulent this is our plan”).

I wouldn’t go into exact details of developments inside the company as they are rather personal and company internal affairs. Some general comments:

It was a very good move by Govt of India to dissolve Satyam board and entrust some of the best brains with the task of getting the mess sorted out. Govt appointed board did a great job in retaining business and getting investors.

Barking dogs seldom bite: Several people had their opportunity of a life time to get some media attention-mainly by making negative remarks against Satyam. Few newspapers like Mint and Business Standard did some sensible journalism while TOI and ET went on to make headlines out of every bit of rumor, gossip and remark regarding Satyam. (A very small % of this indeed turned out to be true, showing they had their contacts is right place) “we’ll not hire anyone from such a tainted company” said one person, a remark that was certainly below his stature and maturity levels.

One year later, here’s a quick status check.


Swimming against all odds, Satyam has managed to retain a decent amount of its business and staff and now understood to be on roads of recovery, winning new business, giving hike to employees. Its liabilities (lawsuits, upaid case and others) about which some people made big fuss, appeared to have vanished for all practical purposes. (upaid was resolved for a tiny amount of 70million$). Share price has been steady around 100-120 levels, half of what it was an year ago. Its current financial health and other details are yet to be audited and made public. Which, when done, will certainly boost confidence and share prices, assuming it to be favourable.

Status of investigations, what exactly they (investigating agencies) found out and when will they conclude it remains by and large unknown. Everyone seems to have almost forgotten about it and have moved on to more happening topics. Rumor is that Mahindra Satyam will be merged with TechMahindra, which, if done, will be end of Brand Satyam. Even if the earlier business and profitability is regained, employees will miss a chance to feel proud that they’ve rebuilt Satyam.

Ramalinga Raju:

In good faith, I believe the person in prison is real Ramalinga Raju. However I am still concerned about a possibility wherein Raju might have found a look alike and convinced him to go to prison (this happens in movies, so why not in this case which as as good as any movie?), while he is having a last laugh sitting somewhere (Budapest, Hungary? Most of Satyam’s quarterly results used to be released from there) enjoying his fortune.

Even if it is real Raju who is in prison, knowing how long our judicial systems take to close a case, it is highly likely that Raju will come out soon, either on bail or on medical grounds. It is still a mystery what exactly he did and why he did all these to a company he built so passionately.


Current exact staff count at Satyam is not known, but wild guess is it is about half of what it was one year ago (this mint report pegs the number at 30k). From what was initially thought as total collapse, it is good to see at least 50% jobs are intact one year later. Of the rest, a good number would have left on their own to land better jobs, a few would have settled for similar or slightly lesser paying jobs and some more could still be jobless. Firing people is never treated as a favorable move, but it is a catch20 situation-you need business to pay salary and you need good talent to deliver projects. Now that business outlook looks positive, Mahindra Satyam is learnt to have taken measure to retain staff by way of hikes and bonuses. Hope this pays off and checks attrition.


They certainly didn’t deserve to loose their money. But then, that is the inherent risk in shares-no one complained when Satyam shares soared to 400-500 levels. As a fundamental rule, one is not supposed to put all his eggs in one basket. If someone says “I lost my lifetime savings due to Satyam scam” he is either too greedy (to invest all his money in one company) or outright stupid. Those who did panic selling must be regretting it now.

I am sure a lot of them also made good money-those who had managed to buy when Satyam share prices reached all time low of under 10 rs would have seen their money multiply by 10 times over. Those who would have cared to buy at 40-50 levels would have got 2-3 times return. Assuming that audited financial results, whenever they come out, will be favorable, Mahindra Satyam is a good buy at current level of Rs.108

//this post is growing too long and I am running out of time. Will publish part 2 for rest of it.

Also read: Read Kavitha's post on this issue at Mota a group blog of former and present Satyam employees. My 2006 post on IBM's Satyam acquisition rumor *


  1. That is a very balanced post indeed and I believe that time would have been quite painful personally.

  2. yes, had to hurry little bit as I wanted this to go live today. WIll write part 2 leisurely, with more insights

  3. I agree with Mridula a very balanced post indeed.

    I can tell to it is very difficult to discuss your company in public domain, the question of ethics and loyalty is involved. I happened to me many a times, but I resisted. I have to.

    What Satyam was? A scandal or an opportunity depends upon the way you are thinking. On a point of view of onlooker (I am not an investor, only interested with Corporate Governance aspect) it was an opportunity to see how the system responds and works. Seeing the fate of Enron, Worldcomm I can fairly say it was a epoch making move.

    Company is an artificial person, it can only be born by a process of law and die only by a process of law. Satyam shows how a company can be made to withstand these hiccups.It shows the internal systems of the company which made it and kept it attractive to its customers and to its suitors. For many doomsdayers, they haven't understood this simple logic.

    And for media, most of the time it need masala, TOI and ET and rather have a reputation for it.

  4. Its difficult to say they were(sathyam) ooportunists...hmmm..any how u have mentioned all possible things..verry balanced post.

  5. hmm... dont know what kind of a corporate gimmic this is..
    but.well people who saw opportunity made money with this corporate

  6. Hi Shrinidhi......

    I too wrote a post today but not connected to what you have written...But you can read it here if you wish:

  7. Kavitha,
    Thanks for dropping by. I visited Mota after long time. Will try to be more active there.


    Anon: I agree

    Subramanya Bhat: OK

    tarun: Thanks for the detailed comment

    Thanks all.

  8. the bit abt Raju was the most entertaining :D

  9. Anu,

    Hmm good that you find it entertaining...


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