Opinion Satyam scam
The lead editorial in the latest issue of CPI (M) mouthpiece Peoples Democracy uses the Satyam fraud to argue that capitalism thrives on deceit....
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The lead editorial in the latest issue of CPI (M) mouthpiece People’s Democracy uses the Satyam fraud to argue that capitalism thrives on deceit. It says the mega loot has also exposed the systematic malaise of the new IT economy that had tended to dominate India’s recent economic liberalisation trajectory. It says while the scandal should be investigated,it should cover all aspects of the swindle and not confine itself only to the cooked up accounts. “By selling shares when the prices are high,the profits could be used to acquire real assets elsewhere. The more inflated the share values,the more such assets could be acquired. This needs to be probed. Were the profits raked in by these sales used to acquire assets by the eight other Raju family companies,including Maytas Properties and Maytas Infra?” it claims.
“It is high time that the prime minister and his cronies in the Planning Commission live up to their,so far hollow rhetoric,of not wishing to legitimise,leave alone permit,crony capitalism. This entire episode,once again,reconfirms the saying : ‘Deceit,thy name is capitalism’”.
Governance awards
An article by Jayati Ghosh titled ‘And the award goes to’ says if the recent experience of Satyam is any guide,“maybe we should start by being especially suspicious of all award-winning companies.” She says Ramalinga Raju was named the “Entrepreneur of the Year” in 2007 by the consulting company Ernst & Young,while the business media,including TV channels and journals,proclaimed him “Man of the Year”,“Business Icon”,“Role Model for Young India”,etc. Investor Relations Global Rankings (IRGR) rated Satyam as the company with the “Best Corporate Governance Practices” for 2006 and 2007. By the company’s own reckoning,the most impressive achievement was bagging the “Golden Peacock Awards” for corporate governance,distributed by the UK-based World Council for Corporate Governance. “And what was this particular corporate governance award for? It was under the category of special achievement in ‘risk management and compliance issues’!! It was noted that the ‘importance of ensuring best practices in corporate governance is magnified in difficult economic environments’”
Yechury lecture
The edition carries the text of a lecture delivered by Sitaram Yechury on the economic crisis. In the lecture titled ‘Massive dose of public investment is the only way to stimulate growth’,he says capitalism,in the wake of this crisis,has embarked on a spate of nationalisations that would have surprised the former socialist USSR. “Defending capitalism,in this present crisis,means greater State intervention. The paradox,however,is only superficial. The fact remains that the capitalist State has always defended and enlarged the avenues for private profits. These bailouts,as the future will testify,are designed precisely to first save and then to create new avenues for profit generation,” he says.
Yechury says that independent sovereign countries like India can protect only by insulating ourselves from such massive speculation. “To a large extent,if India has been spared a full throttle devastation,it is because the Left prevented the current UPA government,during the last four years,from embracing greater financial liberalisation. Even our worst detractors are forced to admit this,though most reluctantly!”
“It would,indeed,be suicidal if the government embarks,as it appears to do,on a path of relaxing the regulation on the flow of international finance capital in the name of injecting greater liquidity into our economy”. “What is required is a massive dose of public investment to generate employment,domestic demand,thus stimulating growth. The prime minister has announced a Rs 20,000 crore investment programme. This translates into a meagre USD 4 billion,” he says.
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