Monday, January 12, 2009

MAYTAS: TRUTH INVERTED; GREED IS KING

Maytas is 'Satyam' (Truth) written backwards. It appears that Ramalinga Raju named the IT firm that he established in 1987 'Satyam' after a great deal of deliberation. During those initial days he was perhaps motivated by the trail of truth that had been blazed by Narayana Murthy led Infosys that had established new norms in corporate governance and transparency. Or was it that he chose that name only to project an Infosys-like face to hoodwink employees, shareholders and other stakeholders about the bug of greed that had bitten him even then? Whatever may be the truth, 21 years down the line, he finds himself in jail and his Satyam in respected hands led by HDFC Chairman Deepak Parekh.

It is common knowledge that when greed takes grip, the first casualty has to be truth. No one ever admits that, except to friends bathing in the same 'hamam'. But, the signs begin to show. Maytas, the name of the company set up by Raju in the name of his son for his forays into real estate, construction, infrastructure etc, represents that unconscious slip. It may sound trendy and not repulsive like 'Mar' (kill) that emerges when you write 'Ram' backwards, but it cannot conceal the inversion of 'Truth'. Not now in any case when the truth has finally emerged.

Is it any wonder that Raju bled Satyam and fed Maytas over the years? As the skeletons tumble out, it is emerging that Raju was not just inflating Satyam's profits; he was siphoning money out of the firm to fuel his limitless greed for land, among other things. According to his own admission, Maytas Properties, owned by his family, has a land bank of 6800 acres in Andhra Pradesh, most of it in Hyderabad. And, according to some reports it has been acquired in collusion with the government at rock bottom prices, to make a killing thanks to projects bagged by another sister firm.

Maytas Infra Ltd has grown exponentially over the last few years. In three years, its turnover has increased eight times, from Rs 220 crores in 2005-06 to to Rs 1,670 crores in 2007-08. Last year alone, it won more than Rs 18,000 crores worth of new projects, including the Rs 12,000 crore Hyderabad Metro project. It may be recalled that E Sreedharan, the spotless father of the Delhi Metro, had in September last year said that "The BOT operator (Maytas) has a hidden agenda which appears to be to extend the Metro network to a large tract of his private land holdings so as to reap a windfall profit of four to five times the land price." But, then no one was listening to him, we now know why. On the contrary, Chief Minister YSR Reddy was going over the top in extolling the virtues of the project. Naturally.

The inversion of 'Truth' dose not end at Maytas. Raju has also floated an ambulance service company, the Emergency Management and Research Institute (EMRI), ostensibly a not-for-profit organisation, that has entered into partnership with governments in 10 states. It already runs 1300 ambulances and plans to increase the number to 10,500 by 2010-11. This translates into a capital expenditure to the state governments of Rs 1,800 crores for the vehicles and Rs 300 crores for control rooms. In addition to this is a recurring annual expenditure of Rs 1890 crores on the ambulances. All this on a platter, without competitive tendering.

Raju had manifestly spun a complex web of bribes and kickbacks across the country, involving top political leaders and babus as well as those in the lower echelons in the government, to facilitate his blind greed. Satyam was apparently the cash cow that he looted to death to finance his blazing growth. Everything was going according to plan and he would have probably covered his tracks too had there not been an unanticipated global meltdown and a slowdown in the Indian economy resulting in a crash in property prices and virtual evaporation of demand in the real estate sector.

But, that was not to be. And today, Ramalinga Raju's empire based almost solely on untruth has all but collapsed and he is sharing a prison cell and an Indian-style WC there with ordinary, petty criminals.

Not all Rajus are going to meet this fate. Many have got away undetected and many will still pursue their dreams in the same fashion. "Greed is...good". Michael Douglas had uttered these famous words in the 1987 movie 'Wall Street'. In 2009, in the light of what we have seen in Satyam and in Wall Street, he would have not hesitated to say that those words were a serious understatement.

As the Satyan-Maytas-EMRI saga unfolds more and more, we will get to know, at least in whispers, that the amount of money stolen by everyone in the system is much, much more than what Raju had obliquely admitted in his clever letter of 'conscience'. He may be down and out today, but don't be surprised if, at the end of it all, he and all others at the top of the power heap who have made untold fortunes by deceit, get away lightly.

The establishment in India has not just institutionalized corruption, it has turned it into a fine art respected and prized more than a Hussein painting. On top of it, our lax judicial system is designed to make conviction almost impossible, at least in a practical time frame. So, it is now the turn of a few great lawyers to make the biggest killing of their lives on the ruins of Satyam. They too will spare no efforts in milking Raju and co, in a manner little different from the one the latter had adopted to milk Satyam and the state of Andhra Pradesh.

Greed is King. Has been, will be. The Satyam fiasco is not going to stop those who are consumed by it. On the contrary, considering the fact that Raju and gang almost got away with billions with ease, it will only make them greedier and 'smarter' in a world that defines almost everything in term of bucks. Black bucks may be an endangered species in the wild, but in the thick jungle of corporations and governments, their population is only going to rise exponentially.

Vemaytas Jayate!

Modi and Reddy: The choice is clear
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