I am angry.

Every time something goes wrong, it’s the media’s fault. Just today, I received a mail that read something like this:

“Attached are the new Sebi guidelines for FMPs. No portfolio, no indicative yield, no exit.
This product just got killed. I hope the media is happy. Every one is going into bank deposits where the loan book is very, very transparent!!!”
(A confession first…I did a spell check on this letter.)
Whether it is coverage of the Mumbai attacks, undoing of some fund houses, or even the Satyam fracas, it’s always the media that’s to blame.

More ridiculous is that some websites or columnists have even said the media should have delved deeper into Raju’s machinations before promoting or giving him awards.
Can someone answer this simple question: With Price Waterhouse as auditors, very capable (now, very maligned) independent directors and Fortune 500 companies as clients, why should the media get the flak?
Or is it a crime to report anything negative?
When the going is good, no one complains. That is, if there are a few frauds (and there are quite a few ones) during boom time, they are overlooked. Even if there are strong reports, positive sentiments override them. The attitude then is, “arre, aise choti choti baatein hoti rehti hain“.

But when everyone is strained, jobs are under threat and making money becomes a difficult task, people are quick to pounce on the ‘messenger’.
As if the messenger caused it.
Let’s get this clear. Skeletons have to come out of the cupboard for them to be reported. And these things happen more during a downturn because there are fewer places to hide.
The Satyam saga and the World Bank’s strictures on Wipro were reported following a confession in the first instance and the second being put up on the bank’s website. And the media has not tried to hide it under the carpet.
Of course, there could be more similar violations. But we, more often than not, do not have the manpower or the expertise to explore such areas. No wonder, we have to rely on secondary and sometimes, even tertiary sources. And sometimes when investigation is done and gets reported, it is conveniently termed witch-hunting.
The media’s role is to report…often unsavoury things. But they did occur in the first place, right? That’s why we reported them.

So, Ramalinga Raju has high blood pressure, acute ulcers and even diabetes. Just a fortnight back, I was not aware of such intricate details about the (now ex) chairman’s health of India’s fourth largest IT company.

Isn’t it funny that no one seems to get such serious diseases while swindling over Rs 5,000 crore? Didn’t his blood pressure go up sharply every time he was fudging those numbers… how many zeros did he have to add every quarter and, if I have to believe his confession, for seven years, to ride a ‘non-existent’ tiger?

Over the years, we as journalists or citizens, have watched helplessly as politicians and white-collared criminals have `fallen ill’ or used other ways to evade the law.

Let’s take Raju’s case. On Thursday, market regulator Sebi summoned him at 5 pm. His lawyer appeared and said that he will appear on Friday at 4 pm because he was ill. On Thursday night, the man and his brother went and surrendered themselves to the Andhra police and were promptly arrested. Now Sebi cannot get access to him till January 16.

But there are other important questions.
Why haven’t his bank accounts been frozen? No one has any idea. Newspaper reports suggest that he has confessed to the authorities that he fudged the numbers. Then why can’t his accounts be frozen as a precautionary measure, so that Satyam’s shareholders and employees will not be left in the lurch? (Was he even paying the company’s contribution to the Employee Provident Fund for the 53,000 employees?)
Or will shareholders be simply have to be told that only invest in companies after doing proper research, look at the management’s past and stupid numbers like cash flows?

But even professional fund managers were fooled. Aren’t they supposed to have a whole lot of research data from so-called analysts, who are paid exorbitant salaries?

In fact during the month of December and I suspect, when the Maytas merger deal did not fructify, many fund managers bought Satyam shares because their ‘analysis’ said it was cheap and did not reflect the company’s fundamentals. Many brokerage houses also put a ‘buy’ call on the company.
So as investors, who do we trust? Fund managers cannot make the right call and brokerage houses are as clueless.
Does anyone suspect, why the small investor, is always scared about the stock market. Whether it is Harshad Mehta or Ketan Parekh or C R Bhansali or Raju… small investors suffer.
In some ways, it is good that the retail investors’ participation in the stock market is quite low. Our institutions are incapable of protecting them…There is ‘no courage under fire’.

Surely, he is a great chef. To have cooked a Rs 7,000 crore or $1.4 billion dish, he needed some special talents. Sadly, the 50,000 plus employees and lakhs of shareholders are not in a position to appreciate it.

What is scary is the lack of action on the part of our institutions.

In the US, two firms have already gone for a class suit action. In India, the central government is claiming that the Centre cannot ask the state to arrest Raju (as it is a state subject). And even now, the state has not filed any criminal charges.

Instead the state chief minister has urged that the good offices of N R Narayan Murthy (Infosys) and Azim Premji (Wipro) should be used to provide credibility to the company.

At present, market regulator Sebi is checking the books of both Satyam and audit company PriceWaterhouse.

Both the exchanges have said Satyam will be replaced by other companies from Monday, January 12. Compare that with NYSE, which banned trading on Wednesday itself.

What is worse is that according to the letter written by Raju, there was no one other than him and the managing director had any idea about this scam.

Someone please make me believe this one. The board members, CFO and others in the finance department, marketing heads… wasn’t anyone aware that the company revenues weren’t actually so or for that matter, their spread was a mere 3 per cent vis a vis the 30-plus per cent that the company claimed. Sounds preposterous…

And the last and the best one, where is Raju? – His lawyer claims he is in Hyderabad. Some others say he is in Dubai, yet others in London. Have any of the authorities met or spoken to him? – At least, no one is saying so. By now, in most countries, he would have been at least questioned by the authorities and put under some kind of house arrest.

While, we wait for investigations and committees to come to with their findings, for now, an important point to note is that that whether it is actual terrorism or financial terrorism, we are equally inept at handling both.

No wonder, whatever’s on the menu – guns and grenades or vanishing cash – in our country, the chef always gets away.

Four rate cuts in four months, two stimulus packages … the important question to ask is whether things would improve after all this.

No. And it has nothing to do with the government’s action or inaction. Some have complained that the package is too little. China and even, Thailand have spent more. But I believe that given the leakages that happen in our developmental schemes, it’s best to give targeted packages.

As I understand it, growth is a function of demand and supply. When there is demand (for anything), either rising supply has to match it or there will be a rise in prices (inflation).

But in today’s market, the question is how does one generate demand?  In an uncertain environment, when there have been job and salary cuts across sectors, a very few would be willing to purchase a new residence or car. It’s simply too risky.

On the contrary, there have been stories about young couples, who have sold their house and paid off the bank as they are unsure if they would be able to pay hefty EMIs in months to come. With such drastic measures being taken, it is unlikely that there will be too many big expenses lined up.

Even banks have been wary about extending loans as well. Already, there have been quite a few defaults. Scared, many banks have started cutting credit limits to their customers, especially cash limits.

Further, investors in the stock market have already seen their investments eroding by over 50 per cent.

In other words, when salaries are not steady, credit is unavailable and a negative return on investments… where’s the money to spend?

To stimulate demand, salaries and incomes will have to rise or at least, be steady. More importantly, safety of jobs will have to be ensured. And I don’t know how much of a role can the government play in ensuring these, especially in the private sector.

The bottom line: Till people start making money, they will not spend. And that means no or little demand.

The response to the stimulus packages will be slow… perhaps, even painfully slow