Satyam's lie
Companies ride on market perception and cooking the books can burnish that perception to breathtaking highs. Until someone cries foul. Enron was once billed America’s most innovative company. Then a massive accounting fraud, exposed in 2001, blew up on the US energy giant. In 2009, the script has been revisited in India. Boasting Fortune 500 firms among its clients, Satyam Computers won a top award for corporate governance in 2002 and 2008. Its fall began with chairman B Ramalinga Raju’s aborted buyout of two Maytas firms founded by his sons. Angry shareholders swiftly punished this brazen display of nepotism in India’s fourth largest IT firm. The sequel to Maytas is more sordid. Confessing to a Rs 7,136 crore fraud, Raju said Satyam’s books had been cooked for years to inflate profit and revenue figures. In September 2008, they showed a non-existent cash and bank balance of Rs 5,040 crore and hundreds of crores of fictitious accrued interest and debtors’ position. Liabilities worth Rs...