A business family with a small promoter shareholding in a blue chip company uses company cash to bail out concerns run by the sons of the paterfamilias. Big name independent directors of the blue chip’s board greenlight the deal. All hell breaks loose. What could be a more damning indictment, as 2008 draws to a close, of India’s institutional frailty, its tendency to prioritise chums and chachas over rules and regulations, its hollow governance, corporate or otherwise, core that’s ignored by a self-congratulatory and self-obsessed elite?

Were I smart and famous enough to be a columnist for London’s Guardian, I would be writing that the Satyam scandal is proof again that New India is just so full of dirty, old tricks.

But being a simple kind of chap, I have a different take on the Satyam scandal: it’s the year-end marker for a clean, new trend in India. Those who have power of any kind are having to reckon with the fact that those in whose name power is vested are getting a lot more discerning.

There’s no reason to get breaking news style breathtakingly excited about this. No one is arguing that a revolution has been spotted. But there’s enough evidence to say that in the big, complicated, messy thing that’s public space in India, the public has started posting a different sort of message. There are demonstrations of this from business, policy and politics.

Satyam’s volte face was thanks to, as has been widely noted, shareholders’ voting in the market. This kind of judgment call on a decision, as opposed to on results, rarely happens in India. Typically, even institutional shareholders in India look at ends, not means. True, foreign institutional investors raised the first flag against the Satyam deal. But Indian shareholders were as severe. This is a new, tough deal for promoters.

... contd.