Q&A: a.k.a Slumdog Millionaire

There were two choices before me: Either I could watch it in the cinemas or read the book. I chose the second one because of two things. One, it would give me the private freedom to make as many movies as I want, and Two, usually books are better. I feel like I have lost this time - even before seeing the movie - not because the book is a disappointment, but because this is one of those books which really is a movie masquerading as a novel. This is really a movie script minus all the technicals. If Danny Boyle had not picked it up, surely someone in Bollywood would have. The only little surprise the author or the publisher might have had was that it was someone from hollywood.


I had no qualms about the genre of the book when I bought it. Less expectations gives you lesser disappointments. I am angry only when I am sold a second rate stuff marketed as first rate. "White tiger" was such an experience, this was not. I knew that I was reading a masala - and I knew that this wasnt a Da Vinci Code either. So I am alright.

What is my final word? Yes. This is time pass. But see the movie first. Why? Beacuse I am sure you will get the same experience for a fraction of the effort.

Why we carry you.

You are the only prominent personality in town. You can walk into any store, buy as much as you want and issue your personal cheque. They will accept it with a smile. In fact, they are grateful to have your cheques.

There's a catch. Because of your reckless shopping, your bank balance is running very low. Almost zero.

But you are completely at ease because you know that those cheques will never be cashed – instead, those cheques will be preserved. Idiots!

Shopkeepers and traders are also relaxed because they think you are the richest person in town and your cheques are safer than the national currency.

Imagine that this goes on for a while. For years. Meanwhile you are growing, very fast.  With your consumption, the traders are also growing. Every person, shop and even bank is counting their worth in your cheques. No one has thought (dared) about  cashing the cheque. Well, till now.

A reckless trader in town hates you. He announces that he will not accept your cheques anymore. He needs the actual currency. Worse still, he requests some other traders to do the same. They are on the verge of announcing it. 

What would you do?

Your whole existence is at stake. You would do whatever you can to preserve your prominence and the luxury that it brings. You do not want to lose all this just because of one trader.

You and your think-tank plant a few skeletons in his cupboard and opens it in public. You publicise this in your own newspaper, your own TV Channel and you have taken everyone (almost!) to confidence. Now it is accepted that he is an evil man and he should be destroyed. All the other big traders announce support for you and sends you their hit men.

And why do you think everyone supported you? Are they idiots?

Of course not. They did it for it their existence. Why?

You have grown too big and you are their biggest customer. Without you, they have to shut down their shops, factories and banks. They face disaster.

These guys are neck deep in your scam. Almost half of their assets are measured in your cheques. They know that your cheques are worthless but as long as they keep their mouths shut, things will go on as usual.

Now you know the real meaning of "having them by the balls".

They need to preserve you. They have to carry you on their shoulders.You are a national treasure. Whatever you do, they have to follow suit. There is no way out.

Now substitute U.S for yourself. Saddam for the trader. Dollar for your cheques - well, not the dollar - U.S treasury bonds.

How would you like your tiger?

"White Tiger", is supposed to be a rare species. But I cant say the same about the book. Adiga has written this book for a foreign audience who wants to know more about the India buzz. And he hasn't disappointed them. It tells them exactly what they want to hear. They are happy.

The book does a superficial analysis of the life of people in the "Darkness" - namely, of lower caste, working class. Adiga has chosen Balram Halwai, who migrated to the big city from a small village in Northern India in search of a better life. He becomes a driver to Mr Ashok, an upper class confused desi, recently returned from U.S, son of a wealthy and powerful coal miner. The story unfolds in the form of letters written by Balram to the Chinese prime minister who is scheduled to visit India somewhere soon in the story line.

The book is a fast read. It is cleverly written too. It has flashes of brilliance. But when you deal with a subject like this, you expect some depth, some content. You expect a point of view that you did not expect. Clever one-liners or good analogies are not enough. Ultimately, you feel betrayed. Maybe it is the booker label. Well, thats a very personal opinion.

Afterthought:

The name "White Tiger" actually suits the novel. How is it different from a normal tiger? It is the same species, only thing is it doesn't have the pigment. And that is exactly how white and brown skins are different.

Satyameva Jayate

As somebody had rightly put it, Ramalinga Raju had, in one single stroke achieved what LeT (Lashkar-e-Toiba) could not in many years. He has marred the reputation of India’s showcase industry and had shaken foreign investors confidence in India Inc.

 

How could one fool so many people? Satyam’s board had as many independent directors as it could manage – among them India’s former cabinet secretary and a Harward professor. Satyam also had the best (?) auditors money could buy. It had won awards for corporate governance. Its internal audit team was hailed as one of the best in the world (by Institute of Internal Auditors, USA).

 

I simply cant believe this.

 

I would not be surprised if, prior to letting the cat out, Raju (etc) had shorted Satyam shares or ADR and made a tidy amount of money. I would not be surprised if ICAI slaps its maximum fine (Rs 5 Lakh!?) and let PWC walk. The hands that should go up in a voting process could be tied up in partnership deeds involving PWC or its affiliates.

 

What tests my logic is how on earth an audit firm miss Rs 5000 Crore Cash/Bank balance? Did Satyam forge the bank statements? Even though they forged it and produced it for audit, what happens to 3^rd party confirmation letters sent by auditors to banks? The banks are supposed to send the confirmations directly to the auditors.

 

How can you not verify an asset which makes up 80% of the balance sheet?

 

 

Every deed should have a justification or rationalisation. In order to understand it better, let’s put ourselves in Raju’s shoes.

 

One strong motive would be to avoid Satyam being a takeover target. Satyam’s reported OPM (OPM is one of the key yardsticks with which analysts rank similar companies. Higher OPM within the same industry is always the first thing that analysts look for. It indicates that the company can command premium pricing for its services.) was 24% while in reality it was 3% - as per Raju’s letter to the board. With a less than industry average OPM, institutional investors (makes up 88% of the total share holding) could dump the shares which would resulted in an increase in the float as well as a decrease in price. Perfect for a predator. Raju might lose his job. He could have been mortified by that thought initially. To protect that, he might have fudged the books, and as he himself has put it, “it was like riding a tiger”. Not an enviable position, of course.

 

Another motive is the greed for cash (which he denies in his letter). Maybe Satyam had 24% OPM and  Raju had siphoned the money off and thought that by acquiring Maytas he could plug the hole at least for some more years. In that case, the letter to the board could be a red herring.

 

Another scenario could be this – Due to the real estate slump, Maytas was struggling and he had to do something which could save both. With that land bank on the assets side of the balance sheet and by revaluing it, he could plug the hole. He would, of course, not pay Maytas anything in cash because he had none.

Whatever the case maybe, the fact remains that the balance sheet has a big hole. Did the low margins cause the hole or was it plain robbery? By acquiring Maytas, who was he trying to save - himself or Satyam or Maytas?

 

“Creative accounting” is nothing new. Companies do it all the time. Take Jet Airways for example, in a lean quarter, it had switched its depreciation policy to come up with $180 Million extra profit. Similarly HCL tech recognised $80 Million revenue when rupee appreciated against the dollar but ignored the losses when the reverse happened. This was due to its large hedging positions. Ranbaxy refused to provide for $180 million losses on derivative contracts. Reliance communications did not recognise $80 Million loss on future FCCB conversions.

 

These practices are called “Creative accounting”. These companies are walking on a very thin line between the best practices and allowed practices.

 

But Satyam was not being creative. This is creation itself and Raju is the creator.

 

What a paradox! I mean name of the company.