Your news report “Bureaucrats’ nomination for civil award has field officers crying foul” (Mint, 21 April) is in keeping with the penchant of our civil servants to grab all the positions, including that of regulators, for themselves. No wonder, therefore, that senior officials of the ministry of corporate affairs grabbed all the positions in the Prime Minister’s Award for Excellence in Public Administration for 2007-08. The best comes out when seniors encourage their juniors. This has obviously been given the go-by. Further, the objective of the award, that of encouraging talent, has produced an opposite effect: dissatisfaction among a large number of field officers who toiled hard to get an effective database but were ignored. Not good augury for the nation’s corporate regulator.
— S. Subramanyan
With uncertainty out of the equation in the Satyam saga and with the Mahindra group having exhibited years of excellent governance, all the stakeholders, mainly the employees and clients of Satyam, should heave a sigh of relief.
The Mahindra group is one of the best governed groups in India today. This should go a long way in restoring the confidence of Satyam’s stakeholders.
The deal is also a significant opportunity for the Tech Mahindra management to diversify its revenues from its current excessive dependence on the telecom sector. The deal has the potential to take Tech Mahindra to the next league and become one of the top five IT companies in India. Also, with all the financial muscle of Tech Mahindra and the Mahindra group, the deal has the potential to take care of the entire short- and medium-term fund requirements of Satyam’s operations (even after considering the funding of the deal). With Ebitda (earnings before interest, taxes, depreciation and amortization) margins of around 27% currently, Tech Mahindra’s operational efficiency will help improve the profitability levels of Satyam’s operations. The icing on the cake would be the recovery of funds from Maytas, claimed to have been siphoned off.
However, the above positive features should be weighed against the negative ones to get a clearer picture. Despite the group’s experience in integrating companies, the integration of Satyam with Tech Mahindra continues to remain a concern and will take a long time, especially in the light of diversity in businesses and management and the damage that the Satyam brand has already suffered since the January revelations by founder B. Ramalinga Raju. Moreover, with little experience in areas other than telecom, the deal could result in existing clients running away to other software companies. Almost 48,000 employees will be added to the existing workforce of 25,000 for Tech Mahindra. This could result in significant layoffs in centralized functions such as human resources and finance among others, and hence may not be taken well by Satyam employees. Even today, there is no clarity on the extent of lawsuit liabilities that could arise on Satyam’s accounts and, to that extent, there is a shot in the dark on Tech Mahindra’s account.
— Bhaumik Bhatia
The current global recession and economic crisis that have wreaked havoc in developed nations have exposed the inherent limitation of globalization and capitalism. Economies such as those of India that rely heavily on, and are driven by, inward consumption are seemingly less affected by this crisis.
A huge growth potential exists in the Indian market, particularly for infrastructure development to serve a billion people, and this will drive and act as a panacea for Indian business, provided we do business in the broader framework of the “triple bottom line”: profit maximization and socially and ecologically beneficial activities side by side.
— Fuzail Ahmad