Slumdog Millionaire


slumdog_150As you know I rarely talk about movies on my blog, but Slumdog Millionaire is one of the best movies I’ve seen in a long, long time. The story and cinematography are unmatched, the dynamic story is about an impoverished boy from the slums that wins millions – an underdog story.  The true underdog of this movie is director Danny Boyle, for an outsider to come into India, a country that produces more movies then anyone else, and create such a quality product is a story by itself.  Of course, Bollywood is now trying to jump on the Slumdog bandwagon but make no mistake this movie was made because they all stayed away.  Director Karan Johar has stated his formula for creating movies is what NRI’s (non-resident Indian’s) like, in reality it’s just sugar coated garbage.

The Oscar nominee list will be available on Jan 22 and seeing that Slumdog just sweeped 4 awards during the Golden Globes they have a shot at an Oscar.

Slumdog gets released in India on Jan 23, if you can wait you can download the torrent file.

Satyam has a new cook

rama_rajuCook as in cooking the books. Satyam is the 4 largest IT major in India and was started by Rama Raju. Today he dropped a massive bombshell that involved an accounting scandal which sent the stock tanking 77%, it closed at Rs 40.25 a share (the 52 week high was Rs. 542). Rama faxed a letter to SEBI Wednesday morning where he outlined the level of fraud and why he did what he did. The letter tries to show him as the knight in shining armor trying to rescue the company…what a crock of sh!@#. According to the letter he is solely responsible and nobody knew anything but him, even though Satyam has over 53,000 employees, had 9 directors on the board and PwC as the auditor.

The meaning of Satyam in sanskit is truth, which brings me to this point about trust. Who can you trust? The founders of the company? The board of directors? The auditors? The analysts? The regulators? The ratings agencies?

To quote a line from my spiritual advisor – LA rapper 2Pac Shakur:

Before I go to sleep
Tell me, who do you believe in?
Who do you believe in?

So why did he do it? The usual culprit is pump up the numbers to drive the stock price up (aka pump and dump). Based on my extensive research (using google and talking to one person) I have two theories:

1. The numbers for the past several years were pumped up by using the cash on the balance sheet to play in the equity markets. When the markets fell last year, that cash disappeared. Is this likely, maybe. When I came to India a couple years ago, I met with a pharma company that had Rs 50 CR on the books and wanted to invest in the equity markets. They said “why invest in our business when we can make 30-40% in the markets.”

2. Government payoff (read bribe). IT companies in India are usually free of corruption but infrastructure and real estate companies are the exact opposite. Rama has two sons – Teja (runs Maytas Infra) and Rama Jr. (runs Maytas Real Estate). Where did Maytas Infra get the money to “win” the contract for the Hyderabad Metro project?

I would highly recommend reading the letter he faxed to SEBI, below is the best line from the letter:

It was like riding a tiger, not knowing how to get off without being eaten

Update:
The lead partner from PwC who handles Satyam is Srinivas Talluri, you can email him at srinivas.talluri@in.pwc.com to get all your questions answered.