There is a strange kind of debate going on in the Indian media as Danny Boyle’s Slumdog Millionaire prepares to hit the screens this Friday. One of the disadvantages of round the clock media coverage, as we have all realized by now, is that a lot of inanity finds prime time viewership that is quite disproportionate to its significance to public debate. The arguments over whether Slumdog glorifies Indian poverty and thus consequently establishes that only Indian slums sell to the west is one such. The Hindi news channels, having by now long forsaken any pretense at news coverage and generating public opinion, have concentrated all their energies on blowing the trumpet for the movie and blaring its soundtrack even more diligently than MTV or the radio channels. Slumdog hardly needs any pre-release publicity; the mad frenzy that has gripped our news networks, who have by now done multiple interviews with anyone remotely associated with the movie, has ensured that enough people will be queuing up to buy tickets on day one even without posters, television campaigns or star appearances of its cast of actors. The English media, particularly the television one, has taken up the cudgels and run debates on whether the four Golden Globes amply prove that a romanticized picture of Indian poverty presented by an acceptable foreigner is enough to set the critics from New York, Hollywood and London running. Is Slumdog glorifying and selling Indian poverty?

Forgive me for being a bit thick, but there are far too many layers that I detect and am unable to unravel. At one level, there is the old fear. That of being identified still as the land of elephants and snake charmers and sadhus lying on bed of nails. This is the fear of the India of thirty years back – that realized too late that much of its spiritual charm for westerners lay in its image of being a place of hardship and renunciation. Placed alongside that, the snake charmers, the slums, the sewage and the grime seemed to complete an appropriate picture. India was a yogic land content in its dirt and at ease with its nakedness and flies. Of course, by the time India itself realized this image, a lot of time had passed and a lot of catching up to be done. This is an image that every Indian now seeks to suppress. Added to this is a new generation of monetarily empowered middle class Indians, the beneficiaries of the unlocking of gates achieved in 1991. And it is this semi-professional, confident and semi-nationalist Indian who now cringes at the mention of his country’s scars. For this Indian, the rise of an Infosys, economic growth, fancy office s and glitzy malls and rising consumer choice and consumption are enough to show that the tide has turned and the dirty, spiritual home of hippies is now a bright spanking Elevate. More than movie critics, it is this Indian who wonders why Jamal Malik’s and not his story makes the Western audiences sit up and award Golden Globes. This Indian begs the question as to why, when he has achieved skill based growth, must the world still look at Dharavi for inspiration. This Indian essentially contests the fact that Jamal Malik and not he is the true representative of his nation.

Alas, statistics, our urban landscape and daily realities of life are against him. For while he might have grown, a great of number of his countrymen are still slumdogs. More importantly, what he forgets is that the person sitting next to him on the high table of self achieved prosperity had some generation of his family that rose from those slums. He overlooks the wonderful stories of those who found inspiration to break out of those stinking drains and cramped houses and let their height grow to catch more the sun. He forgets that in India’s slums are born the dreams of desire. He forgets that he is the inspiration for those dreams. That those living cheek by jowls in India’s many Dharavis look to him and say to themselves – if he can, we can.

Essentially, this young Indian is insecure. Insecure of being pushed back to the land of renunciation and sadhu ashrams. Insecure that the world may fail to recognize him as it looks at India slums. He forgets that what he protests against is a story similar to his – a story of rising against adversity, of facing challenges and summoning grit to achieve a holy grail. Jamal Malik typifies India – yet to let go of it slums and scars, but not lacking in spirit to rise in this world and seeking a better life on his credentials alone. Slumdog is a tale of an India in transformation and howsoever much wealth the insecure Indian may amass, he cannot ignore the slums that dot his urban landscape. For in those slums lie the dreams of tomorrow and from there came the achievers of today.

I put this state of needless debate as my Facebook status and received some interesting responses. One friend was particularly galled by what he called Western hypocrisy in not showcasing their own poverty. That I believe is bit harsh. The West has been more self critical and inward looking that any other part of the current world. You only need to dive into the body of work of a Quentin Tarantino or a Martin Scorcese to explore the cinematic depiction of the underbelly of America. Another friend wondered whether all it takes to win a Booker these days is to get a degree from a foreign university, write about India and romanticize its poverty, corruption and caste system. He believes the west is excited about India’s plagues. I beg the question – Is India aware and excited about it plagues? The answer I leave for you to ponder. I could write another post defending Arvind Adiga’s book but I will mention only two points – read it and judge if you disagree with the picture of rural and urban life of India that he paints. And the second – all around me I see protagonists of Adiga’s book emerging. My grandparents’ young servant – son of a landless labourer from Bihar has taught himself to read English, owned and chucked a cell phone, bought a DVD player, likes to get his hair gelled and coloured, swears by the principle of ‘living within your monetary means’ and not taking debt and dreams one day to be an entrepreneur caretaking multiple residential dwellings. When I look at him, I realize that Adiga and Boyle do not speak to me in an alien language. These stories are resonating around India. These ambitions shall propel India. We must embrace them rather than shying away from accepting the place of their birth. We are, as a nation, surely self-confident enough to look at ourselves honestly in the mirror – to admire our beauty and understand our warts.

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In this season of terrorist strikes and bomb blasts, Satyam chief Ramalinga Raju has left potentially the most damaging piece of explosive amidst the set up of corporate India. If Raju’s suicide note/ confession/ conscience call/ whatever you may choose to label it based upon whatever levels of credulity are still left in you after today, does not shake the susceptible foundations of corporate conduct in India then believe me, nothing will. For ladies and gentlemen, this is not a government controlled sick PSU that has been eating away public money for ages and now has come into the limelight. This is a success story (or an ex success story, again based on your remaining levels of optimism about the company) of the new Indian economy and its sunshine sector. This is the sector and the industry that we sell to the world, this is the service our nation is now synonymous with instead of bullock carts, elephants and snakes. In one stroke of his pen (literally!), Mr.Raju has done tremendous damage to this nation’s reputation and effectively signed away the one asset that any business can possess and lose only once – credibility.

For years we have been making jokes about Enron, WorldCom and Arthur Andersen; now we have our very own corporate fraud to humour ourselves with. Yours truly has gone ahead done the same with the title of this post. But this is no laughing matter after all. This is a heady cocktail of corporate fraud, auditor negligence, regulatory oversight and boardroom corruption all mixed together. Raju is nothing but the tip of this iceberg that might well leave more than a few cracks in different corporate Balance Sheets that now seem nothing less than floating Titanics.

Satyam’s fraud has taken the sheen off the Indian IT sector and smashed all concepts of corporate governance and Clause 49 to bits. You wonder what chance corporate governance can have in a country like ours where you can buy your way into anything and where CFOs, Managing Directors, Independent Directors and Auditors can sign off on Financial Statements misstated by crores. And the saddest truth is that all of this would have conveniently been undetected had the dominos not started falling post that abortive attempt to acquire family held companies by the Satyam chief. You and I would have gladly believed Satyam to be a blue chip stock on account of its high revenues, operating margins and huge cash reserves. We would have bought the stock at the markets and hoped it to stay steady as the market rides a recession. None of us would have ever known that revenues are overstated, margins are scanty (3%!!), cash reserves simply don’t exist and that the tone at the top is one set by crooks. In a sense Satyam has belied our faith in the accuracy of corporate announcements, results and financials – there seems little ‘satya’ in all the jargon spouted by the companies and the analysts. You and I will now look at every success story in India with a degree of scepticism; every corporate profit surge will now have to pass the ‘Satyam test’ and this loss of faith is one reason sufficient enough for Mr.Raju to be prosecuted criminally. If you can make fat bonuses and salaries by running your company and make gains through insider training, then you might as well face the flak when the chickens come home to roost.

The question everyone will (or atleast should) ask is, how can Rs 5000crs of cash and bank balances be overstated? As someone who belongs to the profession and has audited cash and bank balances numerous times, I can safely state that such a fraud is simply not possible without connivance of either the auditors or the banks. Audit firms at end of every period compare bank balances in company books with bank statements and balance confirmations obtained on bank letterheads and signed and stamped by the banks. Clients, if they are really innovative, can circumvent this check by printing/ obtaining forged bank stationery and stamps to fool the auditors. This amounts to a scam of Telgi proportions! Auditors can guard against this risk by confirming bank balances independently of client intervention by writing directly to banks – this exercise is adopted at each year end for both debtor and bank balances. During my days as an auditor such letters sent directly to the banks were even posted by us by our very own hands and near our houses so that the client could not lay a hand on them! Now, do you realise why we should all be so interested in finding out the answers that the auditors have to offer? Satyam’s failure is a serious blot on Indian financial reporting and must be treated as such. It calls to question the emphasis that audit firms now place on dressing up audit evidence rather than on actual procedures (all Big 4 practitioners will have some tales to recall in this regard). It also questions the golf course and meeting room kind of corporate deals that occur between large investors, merchant bankers (Merill Lynch by selling shares a day before Raju’s confession might have some questions to answer on its own), CEOs and auditors whereby all financial problems of the company miraculously vanish.

As this story unfolds you would have people appearing on television screens stating how this is a one off case and will not have a long term impact. Well if you want to turn this nation into a banana republic where money can buy anything, then yes Satyam will not have an impact. But make no mistake, this is not an isolated case. Open more books and you will have more dirt tumbling out. We live in a world of Russian roulette – the one that gets caught is a thief, the rest are all saints…till another knife gets thrown and another target is struck. Sadly, I fear nothing much will turn out of our mad flapping. We need an accounting, financial reporting and corporate governance overhaul. We need to make financial frauds and fraudulent reporting into criminal rather than civil offences. We need an accounting regulator that realises that regulation is not about conducting exams and getting the government to issue notifications that guarantee bread earning certification for their vote bank of CAs and most importantly we need a SEBI with sharper teeth that possess a vicious bite. From what I have heard on television all this evening, I doubt any of this will happen. Business channels are worried whether Satyam’s fall will stop the short term rally in the markets. Can you believe it? The world is falling on the Indian IT sector and all that CNBC is concerned about is where the stock market will go! In fact, if anything is to be learnt from this episode, it is that market price of a share simply cannot be used as a barometer of company performance. Today no one cares for Cash reserves, profits accumulated or sound business models – all we care for are quick bucks on intra day trading and short selling. In a sense, the Satyam fall serves all of us desktop/ laptop stock market players right. We invest blindly and the Ramalinga Rajus of this world deservedly rob us of our money. Perhaps we can do better by realising that the BSE levels are not the end all and be all of corporate India’s performance. Perhaps its time to get back some qualitative aspects into businesses. Perhaps its time to get back some virtues that we teach to our kids day in and day out. I suggest we begin with the much abused virtue of honesty.

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