Satyam what it am (is that all that it am?)

Satyam is one of those big ol' IT services/software developer company that we love to hate.

All those jobs off-shored to India. All those clipped, often incomprehensible Indian accents on the phone - tied to the bogus "American" name. ("Hello, my name is Kevin, what is it that I can be helping your with today?") All our fears that India will be producing 1,000 crack computer engineers for every one that our colleges turn out. (Our kids will be majoring in hospitality, beach volleyball, or communications.)

So I'm sure there was more than a teensy frisson in some quarters when the news came out last week that Satyam was in trouble. Big trouble. Enron big trouble.  Go to jail big trouble.

The founder Ramalinga Raju (Raju), and his brother (and co-founder), Rama Raju (Ramu), have been arrested, as has the company CFO (who last fall had tried to unload a slew of Satyam shares while they were still worth something). The Indian government has stepped in to constitute a new board. And rumors are flying all over the delightfully colorful and unrestrained Indian press.

But the somewhat less rumor-ridden Wall Street Journal reported last Saturday that Raju has

...admitted to overstating profits -- and creating a fictitious cash balance of more than $1 billion -- over several years by inflating the amount of debt owed to the company and understating liabilities.

(Note: access to WSJ content may require a subscription.)

The magnitude of the fraud is pretty staggering. On Bloomberg, we're told that:

Of Satyam’s reported cash and bank balances of 53.61 billion rupees on Sept. 30, 50.4 billion rupees was non- existent, Raju said in the letter sent to the Bombay Stock Exchange.

Operating margin in the quarter ended Sept. 30 was 3 percent of revenue, instead of the reported 24 percent, Raju said. The company’s revenue was 21 billion rupees, 22 percent less than the inflated figure of 27 billion rupees that had been reported.

That's a lot of rupees, even at 50 to a buck.

Then there are 53,000 employees at Satyam, and while a good old jingoistic response might be to say 'tough them,' some of those employees are good old Americans. Satyam has offices throughout the US, including in Bentonville Arkansas (so I guess you-know-who is a customer). So if Satyam goes down, it will take a few of "our" jobs with them (even as it can and no doubt will be argued that they've already taken "our" jobs).

There are so many interesting aspects to this, it's hard to figure out what to choose to blog about. But I'll pick a couple:

The unintentional hilarity of the messages on their web site.

• Success: It's about having an eye on the outcome all the time.
• Demystifying challenges: It's about simplifying apparent complexities.
• Uncommon ideas: They can come from any quarter and in many ways.
• Execution: Ordinary people doing extraordinary things.
• Business transformation. Together: It is not alchemy. It is chemistry.

If I were Satyam marketing I think I'd get busy crafting up some "what we do" messages - like we code software, or we provide phone support - and bag these airier, abstract one liners.

Business Transformation. Together. is Satyam's tagline, which:

...reflects the organization’s maturity—our move from service provider to collaborative partner. It also reflects our ability to enable businesses transformation in turbulent times.

Let's see how they handle their own turbulent times, shall we?

When I looked last weekend, the Satyam home page also had sections on their thought leadership on compliance management and business intelligence.

The overarching intent of all of these compliance programs is to help enterprises address four key areas: information integrity, process integrity, controlled access to information, and secure information retention.

I might give compliance and BI a rest for a while.

(By the way, our old pal Bernie Madoff had similar "cringe-inducing" copy on his web site, which I posted on last month.)

And the winner of this year's Golden Peacock Award for Corporate Governance....

May I have the envelope please?

Satyam in September was awarded the Golden Peacock Global Award for Excellence in Corporate Governance by the London-based World Council for Corporate Governance. The council today withdrew the award.  (Source: Bloomberg.)

Just what do you need to do to demonstrate excellence in corporate governance these days? Inquiring minds - apparently far more inquiring than those at the World Council for Corporate Governance - want to know.

And the winner of this year's Golden Brownnoser Award for Corporate Suckups....

Alas, http://www.ramalingaraju.com/ is no longer available. And, alas, I just looked through it without copying any of the information, other than to grab the front page intro.

But, whether it was set up by Satyam employees, or by Raju himself, this site was truly something.

Raju: our god father, our hero, our doyen. It is heart wrenching to hear people saying bad things about you.....

I was able to copy the section below. Yes, I know it's hard to read, but I couldn't grab it digitally, so you'll have to cut it and blow it up if you're willing to read fuzzy text. It's all I managed to grab from the site before it was taken down.

This was followed by page upon page of breathless encomia to our hero. As my brother-in-law Rick, who pointed this site my way, wrote me,  "I doubt even Mother Teresa got such great reviews." My sister Kathleen's theory is that all the "Vanessas," "Kevins," and "Brians" who answer the support calls at Satyam were charged with spending some of their downtime adding tidbits in praise of Raju to this site. There were hundreds of them. (I sure wish that site were still up, if nothing else than to demonstrate the cultural differences between India and the US.  As Kath said, a site about Bernie Madoff would be chock full of expletives and death threats.)

Fight fiercely, Harvard

In deference to my Harvard Business School alum brother-in-law - and in gratitude for his spadework on this post - I was not going to mention that Ramalinga Raju is an alumnus of this esteemed institution of higher learning. The bio on the Satyam website does state that Raju has an MBA from Ohio University, so that time at Harvard may have been spent in one of those drive-by, errrrrr, I meant to say intensive, executive programs.

So he's not really an HBS alum, now, is he?

Ah, well, wherever he got his degree from, Raju may soon find himself with plenty of time on his hands to pursue all the correspondence degrees he wants.

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Title of this post a bit too obscure? Think Popeye.