IL&FS a case of 'ambitious management' without checks and balances: C P Gurnani
Tech Mahindra chief executive C P Gurnani Wednesday said that unlike Satyam case, which was marred by fraud, crisis at Infrastructure Leasing & Finance Services crisis (IL&FS) is about an ambitious management without proper checks and balances.
"It (Satyam) was the largest fraud in the Indian IT industry. This (IL&FS) is a clear sign of aggression and ambitious management which did not put right governance structure. This Rs 90,000 crore (debt on IL&FS) and expansion into 168 companies only shows that checks and balances were not proper," Gurnani said.
Similar to the case of IL&FS where the government has superseded its board for revival of the entity, a panel appointed by the ministry of corporate affairs had taken over the board of fraud-hit Satyam Computer Services way back in 2009.
Mahindra and Mahindra Group's IT arm acquired Satyam Computer Services whose founder B Ramalinga Raju in January 2009 confessed to have fudged company's book to the tune of around USD 1.5 billion.
The government appointed panel overtook Satyam for its revival to prevent job losses from the company. In 2008, Satyam had close to 53,000 employees and had business in 65 countries.
In case of IL&FS, the government too has superseded IL&FS board, former independent directors of the crisis-ridden group has written to new Chairman Uday Kotak extending their "complete support" in the revival of the entity.
As per IL&FS' latest balance sheet, infrastructure and financial assets worth over Rs 1,15,000 crore are presently facing tremendous debt pressure and struggling to service around Rs 91,000 crore in debt which is the outcome of its mismanaged borrowings in the past, another official release said Monday.
In April 2009, Tech Mahindra's fully owned subsidiary Venturbay Consultants emerged as successful bidder of Satyam.
Gurnani was appointed CEO of the new entity which was named Mahindra Satyam after acquisition.
"There is no use of spreading ditsress. One should take call on which business they want to be in and exit from the rest," Gurnani said.
Talking about rupee devaluation, Gurnani said there is no significant benefit to the company from decline in the value of Indian national currency against dollar as the company also hedges funds to handle adverse impact of currency fluctuation.
"We have 50 per cent business coming from the US but there are currency fluctuations in other countries also where we operate which even out the gain. We are not into business of currency. We have to reply more on our core business of IT for growth," Gurnani said.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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