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The truth shall prevail?

A large part of Zafar Anjum's book, The Resurgence of Satyam: The Global IT Giant, is dedicated to dissecting and reconstructing the modus operandi of the fraud

M S Sriram 

At one level, corporate frauds are difficult to pull off. There are thousands of employees, control systems, auditors, analysts, regulators and the board. A look at the history of corporate scams reveals reams written about corporate governance, golden peacocks and the theory of independent professional boards. Reading about scams is titillating at the base level; at a cerebral level, it is introspective. The case of Satyam is no different.

A large part of Zafar Anjum’s book, The Resurgence of Satyam: The Global IT Giant, is dedicated to dissecting and reconstructing the modus operandi of the fraud perpetrated by Ramalinga Raju. The reconstruction effort gets relatively less pages. It would have been interesting if his research had understood the homework done by the Mahindras in the run-up to the acquisition. How does one evaluate a stake in a company that was opaque and fraught with fraud? One that was listed on Nasdaq and was facing class-action suits in the US? How could a clannish company be transformed into a professional one? Was the deal worth it?

Unfortunately, the book does not provide fulfillment. It draws heavily on existing literature, particularly The Satyam Saga, published by Business Standard. While Mr Anjum’s book is well crafted, simple and straightforward, the narrative is inspired by the chronicle style of Tim Bouquet and Byron Ousey, the authors of Cold Steel, the saga of the marriage between Mittal Steel and Arcelor. Mr Anjum also seems to be inspired – in both style and content – by Kingshuk Nag, who wrote The Double Life of Ramalinga Raju. This style makes the text readable. However, the book does not come across as a rigorous piece of work.

Inane trivia is part of this style. The prologue tells the reader how the author stumbled on the story of Satyam, and describes the flight (with the number) to Hyderabad — even the weather and the menu on board. He then gets in chronicle mode: “Karnik could feel a palpable sense of urgency in Goel’s voice. Being a representative of the government, Goel seemed determined to save the situation at Satyam. Karnik gave in and said yes, accepting the ‘responsibility’ in principle.” Unfortunately, this style is not followed in the reconstruction phase. It appears the author had access to the Mahindras (the spine sports the Mahindra-Satyam logo), but we get no insights into the minds of Anand Mahindra or C P Gurnani. Except for the fact that Mr Anjum had an interview with Mr Gurnani and visited the Satyam headquarters to meet a few senior-level employees. We, however, do not get evidence of primary fieldwork and interviews with other stakeholders, which would be necessary even if we treated this as a journalistic piece of work rather than academic research. Instead, the book offers a description of the events that followed the takeover, details the communications strategy, and gives a peek into Mr Gurnani’s blog and the events thereafter. But what about the tension? What about the dilemma of who to trust? The problem of what lay within this black box? None of these come out. The resurgence story ends much before it starts. The learnings are: communication was important; there was internal restructuring; and a shadow board was set up to make the decision-making process agile. The content could have been more insightful than a collage of material neatly culled from secondary sources.

This should have been an important book in management literature. The concept of “too big to fail”, so often used in the banking sector, was applied to an unlikely sector. The government stepped in, while it could have let go. The Enrons, the WorldComs and many Indian companies have been allowed to fail. There was something in Satyam that triggered the government to save it. It was saved without a bailout. A significant share of the credit for holding out must rightly go to the employees, and to the state for handling India’s leading IT brand so carefully. Its competitors in general seem to have acted with maturity, promising not to poach. It was a great case of statesmanship and revival. Though Mr Anjum touches upon this, he fails to weave these pieces together.

And finally, Satyam tells us a tale of how decorative the boards are and the limited role they have in “governance” if the management decides to cheat. The boards could, at best, give strategic inputs and directions, but governance? A question we should probe very deeply.

The book ends with a note that indicates that, ultimately, as the truth prevails, the name might fully be erased when the company merges with Tech Mahindra. A case where the truth prevailed — but not Satyam?


The reviewer is a visiting faculty member, Indian Institute of Management, Bangalore

Zafar Anjum
Random House India, 2012
268 pages; Rs 399

First Published: Wed, November 28 2012. 00:42 IST