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When he landed in Hyderabad in February 2009, Mr T. M. Manoharan, one of the six men chosen by the Government to prop up the fallen Satyam Computer Services, had a seemingly impossible task ahead. Employees had to be given their salaries in 15 days; an anxious 53,000 of them in 66 countries across the globe. The total amount: Almost Rs 500 crore. More worry came from the Rs 2,000 crore owed to customers and service providers.
Getting to work right away, the team negotiated with banks and secured $135 million from two of them, cleared statutory dues, entrusted internal audit to an external firm, initiated forensic investigation for restatement of accounts.
A SWOT analysis helped in figuring out how to use the employees' strengths to grab opportunities, overcome weaknesses and fight threats. Convincing overseas customers to keep faith in Satyam proved a tougher challenge for they were on the brink of shifting contracts to other software providers. “In my negotiations with them, I mentioned the team was not expecting any remuneration for it was an Arasaanga Azhaippu (a Government call). This made many of the customers consider our requests.”
The naysayers' reaction to their success at keeping the company from dissolution – a sheer surprise – made the experience “extraordinary”.
The M.B.A students of Jaya Engineering College near Chennai listened with rapt attention as Mr Manoharan, Founder Partner at Manohar Chowdhry & Associates, spoke on his “Learnings from Satyam Revival,” in a BL Club guest lecture organised by Business Line and presenting sponsor, Central Bank of India.
Government's response
He drew comparisons on Government responses to scams in India and the Western world. The Satyam scam, dubbed India's Enron, forced the Government to act, but in a different way: Revive, not just bail out or allow market forces to decide. The Government, he said, was also concerned about the nearly 15,000 engineering graduates' prospects who rolled out in June 2009. “It wanted to preserve India's image in the IT scene.”
In the US, there were class action suits filed against Satyam after the scam broke out. As a lesson from the scam, the chiefly-US trend, where shareholders can file a case against a firm's practices that ended up in stock price depletion, has been suggested for India, he said.
Another takeaway from the scam was his observations of the “layers of talent” in Satyam. The second and third rungs were leaders and talented programmers. A succession plan just needed to be initiated, for the ingredients were there. “Every company needs a succession plan.”
“The drive to make profits, widen you customer base, build assets, it's all necessary, but you should focus on the intangibles like goodwill, customer satisfaction and human resource development.”
EMRI's emergency health services, a joint initiative of the Government and Byrraju Foundation backed by Mr Ramalinga Raju's family, were started when he was at the helm. “The good deeds he's done, we cannot even aim to equal. But his bad ones, fewer in number, destroyed his reputation.”
In life's balance sheet, he said, one cannot set his/her bad deeds against the good.
“There's no contra-entry.”
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