Friday, February 13, 2009

The Satyam Fiasco : A.S.Murthy : New CEO

Now, as has been the case with Satyam in the past, there are decisions which are difficult to rationalize. ASM has been appointed the CEO of Satyam. The question that arises is, WHY?

It is out in public domain that ASM sold 40000 Satyam shares just before the announcement of 'Strategic Merger' with Maytas was announced. Either he knew how bad the situation was, or he was just caught on the wrong foot. But the point to ponder upon here is that there were more eligible people in the fray.
Take for example Mr. Homi R. Khusrokhan. He would have made an amazing CEO. The reasons:

1. He did not have the Satyam DNA in him, like ASM has. (We'll come to that later)
2. He is a highly respected person in the business circles.
3. He has TATA in his DNA. If Satyam had approached any client with HRK as the CEO, they wouldn't have had any reservations because of the high levels of ethics followed at TATA.
4. He is leading a retired life. So, he would have been the ideal choice as an interim CEO.

Why ASM is not the best:

1. He has broken bread with Raju for almost 12 of the 15 yrs he has spent at Satyam. When the scam is of such huge proportions, ASM getting the benefit of doubt is....lucky!
2. The clients are wary of speaking to anyone who might have been hand-in-glove with the Rajus. They have specifically mentioned severance of contacts in case the people responsible for the scam are still in the company.
3. If ASM is great with clients, as stated, he should have continued doing so in his current capacity. If his stated contacts were amalgamated with the stature and integrity of HRK, the Satyam stock would have jumped a full 50%, at least.

There is a rat somewhere. And it is stinking more by the day. 

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