Satyam sold to Tech Mahindra. One could not have avoided the news on TV yesterday. I also saw Anand Mahindra speaking on the occassion. He said it in so many words that this is a good sign that free market capitalism works.
Oh yes. Capitalism worked for Tech Mahindra and maybe LT, who want to stay put with their stake having become investors by choice first and default later. But the Satyam saga will be as much about corrupt corporate-political nexus as about free markets. There is little confidence that in future corrupt promoters along with politicians will not be take the shareholders for a ride. The manner in which the investigation has gone so far does not give any confidence that culprits will be made to pay.
It will inspire confidence only if the perpetrators of fraud get exemplary punishment including recovery of moneys from their personal wealth. Some of that money should go to existing shareholders at time of fraud. It may be difficult, but the alternative is lack of investor confidence and more such episodes in future. Because of one bad apple, the good companies will be starved of capital.
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