Why buy Satyam ?

It has been four months now since Ramalingam Raju brought down Satyam with his carefully worded letter. I would have given anything to be a fly on the wall in the room where he probably sat with his lawyers to decide which sin he was going to admit to and then put it down in a letter. Yes I do believe that he picked the lesser of the two evils- pretending that there was no money rather than admitting to having stolen money that was always there. But then I digress. Today I want to talk about the aftermath of the letter.

The government has appointed a Board, there have been several bids for the company, a back and forth with SEBI to decide what will be considered a fair date to determine a price for the open offer and amidst all of this thousands of the companies employees have left, taking some big clients with them. But is that so surprising? Do big companies expect employees to sit around like the orchestra of the Titanic as the ship sinks? They were certainly not consulted as the money was siphoned off to other projects.

And frankly in a services organization, the people and their knowledge is all that a company has. Unlike the SAPs and the Oracles and the Microsofts of the world there is no product that Satyam sells. It goes in with people to design custom solutions for clients. The solutions being ultimately owned by the client and the employee having gained knowledge in the bargain.

So that makes me think whether it is worth anyone’s money at any price to buy a Satyam? A company like that really has only two main assets- it’s brand equity and the intellectual power -house of its people. The first has been royally destroyed in a very public way and as for the second it is far easier to just hire people than to go out and buy a company, especially one that is straddled with several pending class-action lawsuits.

So I want to ask all the financial experts out there who are still working on valuations for this company- why are you letting more money get wasted? Just sell the hard physical assets of the company and let this thing pass into oblivion. Those people who have talent and experience will find the jobs if the projects they are working on are worth moving forward with. A bank, a defense company will hire them because they want the project done, Satyam or no Satyam.

So basically let us have the courage to admit that as much as as we would like to preserve Satyam as an icon of the great Indian IT revolution, this is a boat with one too many holes and whoever we sell it to will only be lugged with a loser.