The upside of the WSJ’s evolving journalism model is on display in a well-executed account this morning of the scandal at the Indian technology company, Satyam Computer Services Ltd., which disclosed it faked its financial results, including a $1 billion cash balance that turned out to be bogus.
The paper throws the kitchen sink into its reporting, and includes, besides a 1,600-word story, interactive graphics, four sidebars, and not one but two video reports, including an (insightful) interview with the Journal’s international editor, Nik Deogun, who tells us this is the biggest corporate scandal in Indian stock market history.
The display and resource commitment make sense. The scandal shocked global markets and included a remarkable confession by the company’s founder, B. Ramalinga Raju, in a letter of resignation to the board.
It is with deep regret, and tremendous burden I am carrying on my conscience, that I would like to bring the following facts to your notice.
And:
I am now prepared to subject myself to the laws of the land and face the consequences thereof.
Wow. (I have to say there is something honorable in the shame and contrition Raju displays in the letter and in his willingness to face the consequences. It’s positively un-American.)
Good insight from the Journal here:
More broadly, bankers and analysts said, India’s economic slowdown may prompt further unwelcome revelations from its companies. Some have quickly grown from small, family-operated enterprises to major international corporations. After years in which operating multiple sets of books was a common practice to avoid taxation, some companies may not have developed the corporate governance standards that international investors expect. “There are good chances that such cases will grow, where there are certain accounting irregularities and the truth has been suppressed,” said Jigar Shah, head of research for Mumbai-based Kim Eng Securities India Ltd.
There are hundreds of stories on this, but I doubt there is a better one or a better package (though the Times and Bloomberg offer strong versions).
This is definitely more than the Journal would have given readers pre-News Corp. And more is certainly better.
On the other hand, the Financial Times has six sidebars, so it gets to be a bit of a rat race, doesn’t it?
I’d just note that the Journal’s old approach (pre-2000) would have been to keep this story off page one, on the ground that everyone else had it, and run a (thorough) news story inside or on an interior section front. A reporter would then be assigned to see if a more in-depth piece could be pulled together that merited page one three weeks or a month from now. It was those longer stories won the Journal its glory and attracted New Corp. to the paper in the first place.
Here’s hoping the new model has room for that, too.
Dean Starkman Dean Starkman runs The Audit, CJR’s business section, and is the author of The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.