Fraud Impacttu

The moral of this narration is that Satyam is neither the first nor the last ripoff of the Indian public. It represents not only the ruination of the retail share buying middle class (2.07 lakh investors holding 5.27 crore Satyam shares in just two trading sessions saw the price per share fall from Rs 179.10 to Rs 23.85) but also of the poorer classes who faithfully deposit their savings in public sector banks and who in turn lend to Satyam (the company market cap fell from Rs 15,262 crore to just Rs 1,607 crore). No doubt these banks are re-capitalised by the government but that is by a higher fiscal deficit and hence inflation. The question is why such sophisticated plunder of the nation takes place with very little punishment.

- Subramanian Swamy, Truth about India’s corporate சுச்செச்ஸ்

Update (18/2/2009): The Bank re-capitalisation predicted by Su.Swamy is happening. The Satyam fraud is not the only reason for this, though.