How come media did not spot the Satyam fraud?

A requiem for Indian business journalism, in the delightfully breathless style of Juan Antonio Giner, founder-director, Innovation International Media:

‘Satyam’, meaning truth.

India’s fourth largest software services provider. The darling of Hyderabad.

An outsourcing company with 53,000 employees that serviced 185 of the Fortune 500 companies in 66 countries.

A company which now says 50.4 billion rupees of the 53.6 billion rupees in cash and bank loans that it listed in assets for its second quarter, which ended in September, were nonexistent.

India’s biggest corporate fraud ever.

Hell, India’s biggest fraud ever: customers, clients, shareholders, employees, families down in the dumps.

India’s Enron.

We have heard all the big questions being asked. So far.

How come the analysts did not know?

How come the auditors did not know?

How come the regulators did not know?

How come the directors did not know?

How come the bankers did not know?

Yes. But where is the other question?

How come the media did not know?


How come the English newspapers did not know?

# Not Deccan Chronicle, not The Hindu, not The New Indian Express, not The Times of India.

# Not The Economic Times, not Business Line, not Financial Chronicle, not Business Standard, not Financial Express.

How come the foreign newspapers did not know?

# Not New York Times, not Wall Street Journal, not Financial Times.

How come the Telugu dailies did not know?

# Not Eenadu, not Andhra Jyoti, not Andhra Prabha, not Saakshi.

How come the general interest magazines did not know?

# Not India Today, not Outlook, not The Week.

How come the business magazines did not know?

# Not Business Today, not Business World, not Outlook Business.

How come the English news channels did not know?

# Not NDTV, not CNN-IBN, not Times Now, not Doordarshan News.

How come the business channels did not know?

# Not CNBC, not NDTV Profit, not UTVi.

How come the Telugu channels did not know?

# Not ETV, not ETV2, Not Gemini, not Maa TV, not TV9, not TV5, not Doordarshan

So many media vehicles, but so little light on the infotech highway yet so much noise.

But who is asking the questions?

Is journalism that doesn’t shed light journalism?

Or puff?

Or PR?

Or Advertising?

Also read: Is this what they really teach at Harvard Business School?

Is Satyam alone in creative accounting scam?

New Year card Ramalinga Raju did not respond to

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28 Responses to “How come media did not spot the Satyam fraud?”

  1. Ramesh Srivats Says:

    Well, we live in the world 2.0. Where everyone knows yet no one knows. Check defence 2.0 for the chairman at

  2. jlt Says:

    how abt the market pundits…yesterday say the guy from First global shooting from his hip abt IT industry after a disclaimer that he doesnt know anything abt the IT companies. For all the vaunted and celebrated brains of the stock markets , not one could smell anything fishy and this makes it hard to digest.

  3. Hiker Says: come Outlook missed it?! ;)

  4. oochara Says:

    Sleep or Sloth is India’s biggest sin. Media was slothful in Satyam’s case too, just like how Churumuri was on Nov 1st.

    November 2nd could have made up for the mistake, but you didn’t want to miss out on the sadistic pleasure. You know what I’m talking here, after all you were reveling in we commentators’ gasps for news!

  5. Sam Says:

    too many Tags!

    How come Churumuri did not know?!

  6. Sam Says:

    The Satyam gate has taken all the lime light from ‘the Great Great NGO NGO Scam Scam’!!

  7. Andy Says:

    Agree media missed it.. but thats minuscule when you think how regulatory bodies such as SEBI, RoC, RBI, SEC – who have hundeds of staff employed for this very purpose – who dint have a scent of the scam or have a clue for 12 quarters !

  8. B.N.Gururaj Says:

    When a company is successful (or at least appears to be one), the media, regulators, politicians, bureaucrats, journalists eat out of its hand. There is no end to extolling the virtues of a succesful person or company, praise him sky high. No wonder, none saw the festering wounds of Satyam. None wanted to see. “Humpty dumpty had a great fall”. Now that Satyam has fallen, it has disclosed the single most important failure in India: each one of the regulatory bodies have failed, be it SEBI, RoC, Department of Company Affairs, Department of Economic Affairs, the RBI, banks, the statutory auditors, the General Body of the company, its Board of Directors, the stock exchanges. None can offer any credible explanation at this stage. The losers are the emplyees of the company, investors, creditors of the company, and general loss of confidence in companies perse, and hi tech companies in particular.

  9. Sandesh Karanth Says:

    Posing questions doesnt make a blog post. Try answering them in a serious manner. I didnt get the what this post is tryin to convey…????!!!

  10. Coffee Addict Says:

    Sathyam Shavam!

  11. Gokulam 3rd Stage Says:

    The title presumes that something is right in Indian media in the first place.

    This is the same media that ignores blatant corruption in elections and goes around pretending it never exists. When was the last time a truly investigative piece appeared in India media? I’d bet that not a single media house in India has on its payrolls a forensic accountant (someone who could have unearthed this), or any other subject matter expert necessary for quality investigative journalism. The stories that appear on aviation for example are laughable as they display a shocking lack of knowledge on the subject.

    Our media relies on “anonymous” tips, insider info, and sting operations as a substitute for footwork, all of which can easily be manipulated, sold, or both.

  12. etvraviraja Says:

    TV9is owned by Satyam >associated broadcasting>iLabs>peepul investments (mauritus)…so the Rajus have siphoned all the money to Mauritius?

  13. Rk Says:

    Why should have media known ? How could it have known ? Junk post. A post of one sentence is expanded like Ekta kapoor serial.
    I can’t understand how media is supposed to be God and know-all ? It was a inside fraud and if media was supposed to know, media should have known every other thing happening in this world too. Like who sleeps with who.
    Media does not know what it is supposed to know.
    And is biased too.
    Like DNA carrying a shameful article saying investors sentiments backfired on if two wrongs make a right and allowing him to buy Maytas was good for investors it seems. What crap.

  14. What? Says:

    Guys.. did anyone notice.. TV9 (both Telegu and Kannada) did not show any news about the SATYAM FRAUD nor mentioned it on their ticker . I wonder where ‘Manjunath K’ Aka Filmi funda Manja is.

  15. AnotherOne Says:

    Stupid Qs add to that Ask Why did the Internet miss it?

  16. tarlesubba Says:

    exactly. why did the media not know? or in general, why is the media always clueless about anything that involves quantifiable, tangible, non speculative, non-gaali gopura- idealogical issues.
    We have our own BMIC for example. what was the actual plan, how much land was needed, how much land was actually granted, who were all the case handlers, when where all the transfers done, all these are measurable and quantifiable questions. Media are the only ones with any prayer of reach and resources to be able to track these type of things, yet nobody ever tracked any of all this. bar none. I want to know how many media houses have used RTI?
    What about Khoday family’s land grab? It was a sarkari babu-neta committee(AT Ramaswamy) that actually unearthed this scam.
    It may very well be that, in India, even the much reviled neta-babu combine is far more effective than the media. They atleast have some accountability. What about the media? More directly, the sorry state of affairs in India is not due to the neta-babu but the pathetic media that has let the sloppiness amongst the neta-babu combine to thrive, worst actually profitting off it in an underhanded way.
    Why are you bothered that Raju cooked books to personal profits? Most of the media cooks pre-poll numbers for profit. I think it is the same thing. They cook debates and issues for personal profit- monetary, professional and idealogical.
    This is india’s greatest scam only because it came out. Are we to believe that the media moghuls, with pervasive incestous links to intelligencia, netadom and babudom are somehow more righteous than the IT moghuls, just because they spout self-righteous wisdom day in and day out? That is like saying the swamys, the mullahs and the padres are more godly than the laymen, because the former invoke the gods in every other sentence.
    Why this sudden brouhaha about a businessman? Atleast Raju works within a system that ultimately holds him accountable. What about media? The media’s greed for exclusive coverage and the attendant profits, may have cost one commando his life during the Chabad house attack. Was anybody held accountable? All the personalities involved still continue to retain plush positions of influence. I mean in every other field of human endeavour, incuding neta-giri and babudom and godman-giri, there are known examples of people who have stepped down and given up power on implied guilt. Has any media person ever done that? I dunno how these people sleep at night and carry on as if they are above everything.

  17. swamy ram Says:

    bombaat Qs…one should ask or think

  18. Made in india Says:

    It is wrong statement that media did ot know. Udayan Mukherjee of CNBC TV18 was hinting at the same thing many a times. But since everyone else who knew this kept quiet, he also could not tell it openly. But the day before Ramalinga Raju admitted the fraud, Udayan said in his show that he’s not surprised if Ramalinga Raju resigns before tha board meetings, and the very next day it happened, add to it the magnitude of the fraud exposed.

    Many of the analysts know atleast 25 such companies who cook the books, including the non-reliable Reliance. But at the end of the day it’s all about what goes on between the media-men as individuals and those who cook it out. They know better than anyone else how to keep the matter under the carpet.

  19. sisya Says:

    Subba… spot on as usual!

    as for bmic.. of the gazillion media reports we’ve seen over the years about the deal.. i can recall only ONE.. only one report which even attempted to cut the crap and present the numbers. It was a report in the June 21st 2006 edition of Deccan Herald. It can be found here now –

    Curiously, the actual report by Deccan Herald itself is hard to find. I would do a “kheny moved goal and goal post” on google to find it. but I haven’t been able to dig it up that way recently. Doing that search now on google, brings up a few results… (first) one of which is purportedly NICE’s response to the said report. I haven’t read that response before.. but even that leads to a dead link now.

    I gotta run now…. but can someone do some digging in wayback machine archives or somewhere and dig up this report?

    Anyway… that’s besides the point. The point is.. how amazingly the same DH which carried that report calling Kheny’s bluff has after that not carried a similar report. Not to my knowledge. On the contrary… they’ve carried tonnes of pro-Kheny anti-Gowda reports that I can recall.

    Now.. either Kheny is a crook.. or DG is … or DH is. Or.. the more likely scenario.. all of them are!

  20. Aamer Says:

    Whats the great NGO scam, where can i find out more about it

  21. K.Nityanandam Says:

    The media will only “expose” what is convenient to them or expose those who are not favourably inclined to them.They did not see the hideousness behind a suave,soft spoken, polished chairman who was taking every one for a ride because he had the support in the right quarters(including the media) like Kamath had in ICICI You are absolutely right .Why didnt any one even get a scent of the ASATYAM which was going on in SATYAM. The media is more interested in chasing murderers and criminals ,conducting trial by media, trying to expose hapless individuals or government servants or institutions who cannot retaliate and if they retaliate they clarification will only find a small mention in the bottom most corner of the lat page.

  22. C Says:

    How come you didnt know, how come I didnt know, how come the fellow on my street didnt know, how come my mother-in-law didnt know….

    all because it was COVERED UP. Frauds do not occur in the open. How would reporters in the media know when every fraud occurs. They arent inspecting the books. They arent the auditors. The WSJ and NYT didnt know about Enron. Thats not their job. Thats the auditors job. No shit they didnt know. I didnt know either. It was done secretly! Foolish post.

  23. etvraviraja Says:

    @ Sam! Churumuri knew it on 24th December….

    etvraviraja Says:
    24 December 2008 at 4:21 pm
    TV9 is owned by the sinking ship called Satyam infotech! (banned by world bank yesterday)
    they are also an associate of american broadcasting corporation, which is also a sinking ship!
    more info:
    etvraviraja Says:
    27 December 2008 at 3:59 pm
    Satyam and TV9 are inseperable, even if the ivestors names change!
    Owner/ founder : Srini Raju, Co-Founder of several companies such as Peepul Capital (a.k.a. iLabs Capital), Satyam Enterprise Solutions, D&B Satyam Software (now known as Cognizant Technology Solutions)
    Owner company is a Tax evader too!: has office at Mauritius for tax exempt status!
    Go to TV9 website( still claims that they are part of i labs…to shy away from Satyam tag!
    When their motto is to mislead, you cant expect much of truth!
    Now the questions:
    1.Has the money been siphoned to Mauritius?
    2. On the day of Satyams fall, why TV9 chose to run a Monkey story as Breaking news (wind?), instead of Satyam news at least as a scrolling news?

  24. Industry Expert Says:

    This is actually a good question because other than the media and the auditors, the real question is why didnt the analysts know.

    I knew something was fishy and its not just with Satyam, nor is it with all companies. It’s simple business math and common sense.

    The costs for most firms are consistent and my best guess is within 10% because everyone has pretty facilities, pays good people similar amounts etc.

    In simple staff aug/rate card situations, on the vendor side you consistently see certain firms like Satyam being dirt cheap and not within 10% of all other vendors. The clients look at their own bottom line, but its the analysts that turned a blind eye. They sing the praises of certain firms with their stupid quadrants etc, but they never use the old adage that “if its too good to be true it probably is” or even look at it the same way they would buying a car. You buy a car and you know that the quality affects the price. As an IT services firm you cant run around and say that you have great quality and be that much lower in price unless something is amiss. In the case of Satyam they have quality world class employees, but the rates dont match up to reality thus no profit.

    I wonder if someone will now put the microscope on TCS, Wipro and HCL and really figure out how they do it? In some cases you’ll find that US employees arent being paid their required wages etc.

  25. Nastika Says:

    Metro man E Sreedharan suggested that a “big political scandal” was brewing in the Hyderabad Metro project in September last year, the Andhra Pradesh government threatened him with defamation.

    But, with Satyam chairman Ramalinga Raju confessing to defrauding his own company of over Rs 7,000 crore and accepting the charge that the aborted buyout of Maytas was also part of this fraud, Sreedharan’s apprehensions appear to be justified.

    The Hyderabad Metro project is being developed by Maytas Infra, a company promoted by Teja Raju, son of Ramalinga Raju, and other members of the Raju family.

    Sreedharan had dubbed the Hyderabad Metro a real estate play, a sale of family silver and a political scandal waiting to happen.

    The Hyderabad Metro model has support from the Planning Commission. It was Gajendra Haldea, principal adviser to the panel’s deputy chairman, Montek Singh Ahluwalia, who drafted the concession agreement and also the procedure to short-list bidders on the basis of their financial and technical qualifications

    The Planning Commission appreciated the process and termed the project a model for the entire country.

    Even after getting the clue, media didn’t find it worth to investigate Sreedharan’s allegations.

  26. Ramesh Says:

    Remember Sucheta Dalal, who broke Mehtha scam !
    Now, so many media houses… plenty of business correspondents…why media failled in the first place..

  27. Jerry Says:

    Former executive/promoters of Satyam formed iLabs/Peepul Capital a Mauritius Company . The latter seems to be a private equity/ hedge fund claiming to have raised 350million USD. Where did the monnies come from. WHo are these high net worth individuals this linked to the fictitious Salary accounts in Satyam

    hope the authorities monitoring this website…..

  28. RAMESH Says:

    Satyam is truth and read it from right to left it is Maytas. This actually is the root of the fraud.
    Who are those WHO read from right to left? Any gusess ?
    Terrorist .They read from right to left .They attacked Mumbai on Nov/26 08.
    Raju is of same clan. He attacked BSE again in Mumbai .

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