Consumerism and Frauds in the IT field
Introduction
During the
initial years of Westernization of Indians, many intellectuals saw the world as
an undivided humanity that knows no barrier or religion, race, class, and
nationality (Datta, 2003) . Enduring many
invasions through ages, the Indian had a broad and inclusive concept of world
that emphasized amongst so many religions what we had was one among many religion.
Rabindranath Tagore, the Nobel Laureate in Literature from Bengal, captured
this essential oneness of mankind and visualized a universal man in Indian
philosophy in his famous Nobel-winning Gitanjali:
"When
one knows thee, then alien there in none,
Then
no door is shut. Oh, grant me my prayer that
I
may never lose the bliss of the touch of the one
In
the play of the many."
Neo-liberal Mafia
Off late due
to increased westernization from 80's, many religious gurus are professing faith
in neo-liberalism that includes market fundamentalism, consumerism, welfare retrenchment,
and liberal governance, away from Gandhi's idea of Hindu economics. These revivalist
gurus are professing a mix of economic efficiency, ambitious individualism
beyond the traditional Hindu society, selfish narcissism, acquisitiveness and
excessive materialism for their followers that are taking over the traditional
Hindu ethos of toleration and equilibrium in public life. This new culture is
feeding the consumer culture and exploiting the traditional Hindu ethos for the
sake of new technocratic global-consumer middle class concentrated in few
cities.
The Indian
people had firsthand experience of this new naked commercialization where huge
amounts of money was lost in the bubble busts after bull runs aided by mass hysteria
without taking the operating P/E of the sectors into consideration. The new
consumer class that is getting huge flows of capital from West, when examined
closely, appear both self-centered and riven by paradoxes, seeking validation
for their lives from Hindu evangelist gurus even as they acquire the latest
consumer gadgets. At the same time this group hasn't taken the mantle of
leadership in religion-socio-economic development, and when compared to similar
groups in China or Japan or Korea, they have a reputation for creating chaos and confusion. (Deb)
This
dichotomy in daily ethos among these new adherents of the urban revivalist agenda
has created vast number of problems for an average Indian. The neo-liberal
professors of this movement such as Subramanya Swamy have paid a nominal lip
service to the vast population groups in the country while vocally professing their
god given rights for the unbridled consumerism that has sees no responsibility.
Some of these new jingoist adherents have identified a caste-superiority based
logic in placid Hindu society that legitimizes their dominant position in
High-Technology directorships, in Corporate world, in Faculty positions and in
Government positions . Researchers have found that the vast masses at the base
of the Indian economic pyramid are also affected by the spread of consumer
culture. “Increasing desires to consume branded goods that are advertised
through television is …a consistent and recurring theme.” Moreover,
“intertwined cultural processes of conspicuous consumption, normative change [imposing
a link between consumer goods and morality], and [interpersonal] competition” mark
narratives of low caste Indian consumers. They reflect an increasingly
consumerist content of Indian media that depicts the mythic lifestyles of the
rich and famous. (Belk, 2008)
Satyam Scam
For
example, during the High technology growth of Hyderabad in 2000's, this new
revivalist mafia tried to hijack the technology growth for their own selfish
purpose while locking the vast sections of the population in their flawed
pyramid of the new-liberal agenda. The case of Satyam computers highlight the
nefarious potential of loose-canons that would burst the high-technology growth
(only among Indians). The fraud committed by the founders of Satyam is a
testament to the fact that “the science of conduct” is swayed in large by neo-liberal
agenda, ambition/greed, and hunger for power, money, fame and glory. Satyam
fraud spurred the government of India to tighten CG norms to prevent recurrence
of similar frauds in the near future. The government took prompt actions to
protect the interest of the investors and safeguard the credibility of India
and the nation’s image across the world. If the government didn't take action
in time the scandal had the potential to spiral into mass hysteria that would
have jeopardized the entire IT sector that employed 2.5 million people around
that 2009.
Satyam fraud details
From being
India’s IT “crown jewel” and the country’s “fourth largest” company with
high-profile customers, the outsourcing firm Satyam Computers has become embroiled
in the nation’s biggest corporate scam in living memory (Bhasin, 2009)
Satyam
ownership model was flawed from the perspective of good corporate governance.
There may be three factors responsible for this. The factors are not the causes
of global and colossal fraud, but they provide an enabling environment for
abuse and delusion.
1. First,
being a publicly owned company, Satyam could raise capital inexpensively if its
existing shareholders assigned it a high value. Hence, in order to attract
capital from public, it was under pressure to overstate profits to keep the
company’s bonds and equities in high esteem. The promoters formed informal
partnerships with this neo-liberal mafia all over the world targeting the Hindu
temples, Christian and Muslim groups to develop a profitable relationship in
the High-Technology sector based on false promises.
2. Second, the promoter of the company, Mr. B.
Ramalinga Raju, owned a very small fraction of the ownership stock. He diluted
his holding from 25.6 % in 2001 to 3.6 % in 2009. He could overstate profits
with the objective of influencing other shareholders. This ensured that the
whole operation was risk free for the Owners in case of volatility in the IT
sector.
3. Third
important factor for flawed ownership model may be, Satyam could preserve its
fictitious profits without having to pay big taxes because its profits were
protected significantly from the normal tax laws. They do not pay taxes on
fictitious revenues and 22 profits. There are no penalties. The belief that
exempting firms such as Satyam from service tax and corporate income tax will
make them competitive is a little ridiculous. Satyam would not have overstated
its revenues and profits if it had to back both with real cash. A big part of
the blame for the colossal fraud thus belongs to India’s trade and fiscal
policy makers who gave an uneven advantage to the neo-liberal technology mafia
while ignoring the basic fundamentals of the High technology and its impact on
the vast reaches of the population.
The
owners maintained a consumer relation with the neo-liberal mafia over the
period of 2 decades and won numerous corporate awards all recommended by this
mafia. In 2007, Ernst & Young awarded Mr. Raju with the ‘Entrepreneur of
the Year’ award. On April 14, 2008, Satyam won awards from MZ Consult’s for being
a ‘leader in India in CG and accountability’. In September 2008, the World
Council for Corporate Governance awarded Satyam with the ‘Global Peacock Award’
for global excellence in corporate accountability”. The company provided vast
sums of money to this neo-liberal mafia by funding many higher education institutes
such as IIIT, CCMB etc... thereby ensuring and addicting to consumerism the
placid Hindu masses.
The
promoters successfully cashed out of the company in an immoral relationship
with the neo-liberal mafia over the period of 10 years. The cashed money was
used in funding the real-estate companies and the socio-educational entities
that would support this neo-liberal agenda and in future lay the foundations of
the political takeover of the State governments. The owners were successful in creating a huge network of bogus companies that catered to this neo-liberals while systematically subjugating the vast populations to the consumerism. The owners of Satyam in an unethical relationship with this neo-liberal mafia wrongfully tried to influence fiscal and monetary policy of the Southern States by systematically taking over the social, agricultural, financial, educational, governmental, and meteorological aspects of the morbid agrarian population using an aggressive socio-economic agenda that created a new ecosystem of these fraud companies. The idea was to take over the top positions in the corporate, financial, judicial, religious and political ecosphere of this new ecosystem.
The
government acted swiftly by arresting numerous managers for Income Tax evasion
and the directors on numerous criminal charges. However the promoters of Satyam were able to show accounting fraud and go to prison while the neo-liberal mafia behind the company is free.
Requirement for newer controls
However
this episode highlights the lack of controls at the government level on
managing the IT growth and the neo-liberal mafia. The neo-liberal mafia was
successful in promoting Mr. Raju as the poster boy of IT revolution and got an
international audience with likes of Bill Gates, Bill Clinton, Hillary Clinton
etc.. and subsequently benefited in the western countries such as United States
and Canada by monopolizing many jobs in number of sectors.
The limits and responsibilities of operating a IT company catering to rich western clients were not defined properly in the existing company law. This is high-time the bureaucrats open their eye to this new pyramid scheme wrecking havoc on the age-old society in India. There should be harsher criminal punishments for people caught manipulating socio-political-economic environment for selfish greed.
Works Cited
Belk, V. a. (2008). Weaving a web: subaltern
consumers, rising consumer culture, and television. Sage.
Bhasin, M. L. (2009). Creative
Accounting Practices at Satyam Computers. Creative Commons Attribution 4.0
.
Datta, S. (2003). W
(h) ither Indian Mind . IJT.
Deb, S. The Nation
