Satyam casts a pall cross the Indian IT industry
Thursday, 08 January, 2009
The IT industry has its cross to bear too with the Indian outsourcing company, Satyam being called the Enron of the IT industry.
In the last week it has earnt the ire of the World Bank after supposedly providing “improper benefits to Bank staff and failing to maintain documentation to support fees charged for its subcontractors”, resulting in the company being declared ineligible to receive direct contracts for a period of 8 years from the Bank.
This is now the least of its problems with its chairman B Ramalinga Raju resigning yesterday after admitting the firm had falsified accounts and assets and inflated its profits over several years to the tune of up to US$1.6 billion. And that’s all without the knowledge of the other directors, according to a letter that Raju wrote in his admission of fraud to the board of directors of Satyam Computer Services.
And what were the auditors, PricewaterhouseCoopers (PWC), doing over this time?
This is what PWC said in a statement: “We have learnt of the disclosure made by the Chairman of Satyam Computer Services and are currently examining the contents of the statement. We are not commenting further on this subject due to issues of client confidentiality.”
Back in September last year, all was well with the Satyam operations in Australia with the 1700 staff escaping job cuts and plans proceeding for a new campus to be built at Geelong to house 2000 employees who would focus on software development, research and training.
So it seems no one is commenting either here in Australia or India as we go to press though we have been offered a possible phone hook-up to an official press conference to be held by the company in India today.
This story has a long way to run but we can only wait for more to be revealed or concealed. What it has already done, however, has caused the world to look more closely at the whole global outsourcing phenomenon.
Wire services and Merri Mack
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