THE mega loot that describes the Satyam scam has exposed the systemic malaise of the new IT economy that had tended to dominate India's recent economic liberalisation trajectory. The colossal financial swindle with cooked up account books, surprisingly undetected for so many years, is simply unbelievable. The eventual confession of its prime owner that the revenues and profits were vastly exaggerated in the account books, appears to mask a larger loot and swindle,says a Peoples Democracy editorial.
Paranjoy Guha Thakurta points out the active connivance or passive negligence of Auditors,independent directors,regulatory authorities and the politicians which made the Satyam fraud possible.
This case has been compared to the Enron scam in the US, and indeed there are many similarities. These dodgy financial practices can work during a boom, but start to unravel in a slump. As the Indian economy also slows down, as export orders come down, and particularly as auditors and external investors start looking more closely at the books, there may be more unsavoury revelations emerging from the corporate world. If recent experience is any guide, maybe we should start by being especially suspicious of all award-winning companies,writes Jayati Ghosh on the Satyam scam.