14th April

The suitable boy

The article praises the way entire Satyam episode was handled by the government as well its appointed board, right from the confession of Raju till Satyam’s sale to Tech Mahindra.

The credit goes to the govt as well as the appointed board that completed the sale of the company in less then three months and that too without any controversy. This restores the confidence of investors on the Indian corporate sector to deal with such situations. Besides government, SEBI and Company Law Board also played a noteworthy role in removing the roadblocks to a swift management change. Now it’s only the CLB of Tech Mahindra that has to approve the acquisition. Markets also responded positively as shares of Tech Mahindra jumped 25% post-winning of bid. With Rs. 58 per share, Tech Mahindra has bid 23% higher then Thursday’s closing price and shed away all the speculation of a lower reserve price for Satyam owing to the uncertainty of actual liabilities facing the company. The acquisition would, in fact, put Tech Mahindra as a serious player in the Indian IT sector along the lines of TCS, Infosys and Wipro and expand its presence in US. 

With speedy completion of all transaction and management transition, there would be an end to speculations of Satyam employees, clients and investors that have been suffering since last three months. 

Missed Opportunity

The article contemplates on the missed opportunity by the Asian countries for larger economic cooperation owing to the cancellation of ASEAN Summit to be held in Bangkok over the weekend. 

When it comes to regional economic cooperation, Asia trails far behind Europe. Although ASEAN is there but it excludes India and China; thus representing only a third of the entire population in the continent. However, China, India and Japan were in their own stages of development in signing the FTA agreement in good and services with ASEAN. East Asia Summit was also in an attempt to forge greater cooperation in the Asia-Pacific region. But all these measure got a setback when the much awaited ASEAN Summit was cancelled owning to the political crisis in Thailand. Earlier in December, this is the second time the Summit has been cancelled. Although attempts are made to reorganize it somewhere in August but as of now it’s a lost opportunity. The Summit had on its agenda, following the G-20 summit conclusion in London, the global economic crisis. While India was in the process of signing the FTA, the elections have postponed the process till the next govt comes to the power. Being an executive exercise in some countries, there is no point in waiting for the next government to do the proceedings. 

There is also a possibility of dilution of such larger economic cooperation owing to the growing protectionist sentiments. However, any such view would be, ofcourse, shortsighted.