Davos: NRI business leader Gopichand Hinduja has said scandals such as the one in Satyam Computer will continue to haunt developed and developing countries, although this particular scam may have happened because the IT firm’s founder Ramalinga Raju managed to outsmart the regulators.
The Hinduja Group chairman, who was here to participate in the World Economic Forum, however, noted that the incident might not have much impact on the reputation of India Inc in the eyes of foreigners, who are more used to such scams.
Speaking about India’s post-Satyam image before the rest of the world, Hinduja said, “India Inc enjoys a good reputation. These types of things... what have happened to Satyam, no doubt one has to admit that it is a scandal, but whether it is a developed country or developing country or emerging markets, these types of things will happen...”.
He further pointed out that the Satyam crisis was largely because the founder of the company outsmarted the regulatory framework of the country. “One has to understand that possibly he (Ramalinga Raju) was more genius than regulators.”
The Satyam scandal came to light on 7 January, with a confession from the company’s founder B Ramalinga Raju that he had been cooking the firm’s books for several years. Raju’s confession not only shocked India Inc, but investors all over the world.
Such type of wrongdoings are more prevalent in the western world and foreigners are used to this kind of happenings, Hinduja said. “I don’t think that this has any effect or impact on foreigners. They are used (to such things). These are found much more in the western world”.
A number of other corporate leaders and government officials, who had come here for the WEF meeting, also asserted that the multi-crore Satyam scandal was a one-off incident and said that bigger frauds have happened elsewhere.
Despite Satyam being rocked by what turned out to be the country’s biggest corporate fraud, a number of potential suitors have emerged for acquiring the firm, which has been long recognised as India’s fourth biggest software exporter.
Incidentally, Hinduja group also figures among the entities that have evinced their interests in acquiring Satyam. Other potential suitors include Mahindra and Mahindra, Larsen & Toubro and B K Modi-led Spice group.
Commenting on Hinduja group’s general acquisition plans, the chairman said that the group was looking at potential opportunities arising out of the ongoing market slump, as it has driven the valuations to low levels.
“When the market situation is such, there are opportunities also. We are looking at all sectors...” Hinduja said.
“We are open to the right acquisition at the right price in India as well as overseas. In acquisition, you cannot be sure what will fall on your lap. You may be in the final stage and even then it might not work. One clause here and there, and the deal may fall flat.”