Mittwoch, 14. Januar 2009

The Terror Within

Shortly after the terror attacks in Bombay, the writer Altaf Tyrewala wrote a piece in the tabloid 'Mumbai Mirror' (Dec.7, 2008). He recounted an experience when going to the local RTO (the office of the 'Road Transport Organisation'). What he saw there is so familiar to most of us in India that we hardly take notice anymore. Tyrewala stood in a long queue in front of a window, waiting to authenticate a document he needed for his car. The clerk at the window greeted each client with an open demand for a bribe. If you didn't pay he would find a reason to turn you away, but if you did, "there was nothing he wouldn't do. No car owner's signature on the document? No problem. Registration card barely legible? Will do. Every flaw in your papers, however grave, could be overlooked, for a price".
Tyrewala called his piece "We, the terrorists", because, he argued, "even the massacre of 26/11 had its roots in corruption, the culmination of countless acts of dereliction of duty by the countless faceless people who exist around us, and are often one of us. Those ten monsters managed to get in with fake ID and SIM cards, sailing unhindered into Mumbai's coast, because enough people along the way chose the convenience of a quick buck over the righteous path of restraint and vigilance". He wondered how many people would have died at the railway station when they fled the bullets and slipped on other people's paan gunk. "Our spitting, littering, thieving, bribing, shirking, polluting, insensitive and illegal ways can, depending on the situation, switch from innocuous to lethal in a second". The same goes with the countless bribe-takers among the functionaries of the State. Like the customs officer in 1993 who allowed a crate of smuggled alcohol to be landed on the beach south of Bombay. It contained the RDX which, weeks later, caused the death of 253 people.
I was reminded of Tyrewala's piece while reading the flood of articles about the scandal at Satyam Computers. All of them expressed shock that this billion dollar fraud was perpetrated by people who enjoyed the highest respect as corporate citizens and who managed a highly respected company from a sector known for its high standards of business ethics. But most commentators also said that, while the controls needed to be strengthened, this was basically an 'aberration', the work of a few greedy persons. It did not represent a systemic weakness in India's corporate culture, wich was sound.
I beg to differ. I would dispute the capability of virtually every Indian company to remain spotless in a country and a political system where you have to pay bribes at virtually every step of the way. After the Satyam story broke, local papers in Hyderabad wrote darkly about the 'heavy penalty' which Ramalinga Raju had to pay when, in 2004, the government in Andhra Pradesh changed. Raju, a confidant of the previous Chief Minister, had to ingratiate himself to the new one, in order to 'make amends' and to make sure Satyam would continue to get access to land banks so as to locate its new office space. It may be that this was even more true for its sister concern Maytas, an infrastructure company. But all IT companies are 'land hungry', due to their rapid growth and the constant demand for new offices.
In India, Government is by far the biggest landlord and closely regulates every land transaction. There is no way even IT companies can escape rubbing shoulders with politicians, which is the kiss of death for clean deals. In order to stay clear many companies outsource these services to land brokers - but does that absolve them? Whether outsourced or pushed down the corporate ladder, it is impossible for a company in India not to be tainted by the stench of corruption. There is this pretty image of the lotus flower spreading its purity in a pool of dirty water. It is not an apt metaphor of corporate reality in India.
Admittedly, it is not unique to India. In the USA alone, the rotten eggs of the last years - from Enron to Bernard Madoff - are too many to enumerate. For a long time, Europe thought that it resided on a higher moral platform than the capitalist Yankees or the street-smart Asians, not to speak of the Russian oligarchs. The bribery scandal at Siemens, bluest of blue chips, told us another story. The same goes with the inbuilt checks which are supposed to sound the alarm when 'creative accounting' takes over. Price, Waterhouse&Cooper's, one of the Big Four accountants worldwide, have been Satyam's auditors since 2001. Satyam's internal auditors have received an American award for 'best practices' in 2006, and respectable Ernst&Young made Mr.Raju its 'Entrepreneur of the Year' in 2007.
But it would be wrong to brush all the countries with the same brush. Clearly, in a country like India where bribery is a way of life, where politicians and political parties depend on slush funds to survive, things are much worse than in most other economies. A report by the British Investment Bank Noble Group, published on January 12, 2009, puts it politely when it says that in at least one hundred among the five hundred largest companies at the Bombay Stock Exchange there are "accounting problems". And it states that in India each of the three basic checks on a pomoter's power - auditors, independent directors, regulators - "is either conflicted or enfeebled by political interference. Our experience suggests that manipulative accounting and aggressive promoter practices are more common in India than is generally believed".
More than is generally believed? Well, not in India, for sure. Ask any businessman and he will tell you that the 'RTO clerk' is omnipresent in the system, and that hardly any company can avoid lining up outside his window. Satyam is, as I suggested, different only insofar as the bribing and defrauding did not end at the top, but started and stayed there. This is uncommon and must have to do with the extraordinary greed - 'land hunger' - which took possession of the Raju family, hoarding over ten thousand acres of land in the family kitty of Satyam and Maytas. Normally, the dirty work is being done way down, by clerks and accountants, or it is exported to 'dalals', so that the chairmen and board members can sun themselves in the warm glow of good corporate governance.
One symptom of how the terror of corruption has taken hold of us can be seen in the letter in which Raju confesses to his misdeeds. Misdeeds? The letter doesn't say so. Raju makes it sound as if all he cared for was the welfare of his company. He had to doctor the accounts and invent new revenues and cash reserves so as to ensure the attractiveness of his company. There is admission of error, but the bleeding heart doesn't go as far as admit guilt, or express an awareness of the immorality of his acts. All Raju wanted to do was save his 53'000 'Satyamites' from falling into the abyss. Never mind that it was him who had brought them to its edge.
But let's end the finger-pointing. The greedy RTO clerk and the sanctimonious Ramalinga Raju are not 'them', but 'us'. They are not windows into a dark reality but just ... mirrors. Law-breaking is a way of life here, and I don't exclude myself from it. I tested myself the other day, when I drove to the Post Office in the morning. On a two-kilometres stretch of road, with very little traffic, I violated the traffic rules no less than four times - turning left where I wasn't allowed, burning a red light, going up a 'no entry' street, parking in a 'no parking' zone - all with the excuse that it was early morning, and traffic was thin. I was aware of it on that day, but I would not have been otherwise, inured by the fact that 'everyone does it'. Not least the police: at the red light, I followed a police car who took the absence of any cars at the crossing as an invitation to proceed.
Let me end with Altaf Tyrewala's conclusion: "I was exaggerating when I termed that RTO clerk a terrorist. I have no reason to doubt that he is as patriotic and peace-loving as the rest of us. But if it ever turns out that he'd illegally okayed the documents of a car that was eventually used for anti-national activities, I would hope that RTO clerk is arrested and tried like the very worst of them".