Satyam ka kissa...............

At a time when India R Narayan Murthy who founded country's second biggest tech firm Infosys, described developments at Satyam as shocking, painful and a good warning for other companies in the sector.The Satyam episode is a good warning signal for all managements, said Mr Narayan Murthy, the non-executive chairman of Infosys and one of the strongest votaries of corporate governance in the country. Speaking to ET, Mr Murthy said, it is time for authorities to step in with appropriate action.Following is Mr Murthy's unedited views on the subject.I am shocked and painfully dismayed at what has happened at an important software company in India. It is a total failure of governance. I only hope that relevant authorities get to the bottom of this and take appropriate action.It is important to remember that one Satyam does not make the entire Indian software industry. I believe it is an isolated case. I want foreign investors to realise that there are many honest managements and good companies in this country. While what has happened at Satyam is totally regrettable, I believe that it does not represent India. It just represents one individual and one company.In the short term, investors will start looking deeper into all companies they want to invest in, and rightly so. Once they realise that things are not all that bad and that most companies are decent and managements honest, they will regain their faith.This too will pass. Investors will consider this as an extreme case. Right now, all of us must conduct ourselves in the most legal and ethical manner. It is a good warning signal for all managements.Indian equities ended sharply lower on Wednesday as investors’ dumped realty and IT stocks after B Ramalinga Raju, chairman of Satyam startling confessions of fraudulence in company’s books.Satyam’s balance sheet as on Sep 30, 2008, carries inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 reflected in the books). Further, it carries an accrued interest of Rs 376 crore which is non existent, and understated liability of Rs 1,230 crore on account of funds arranged by Raju. It also has over stated debtors position of Rs 490 crore (as against Rs 2,651 crore in the books).