Indian IT Industry

paramu · Post by **paramu** » 09 Jan 2009 02:49

Does anybody see an attempt to bring Indian economy down to its knees (it had all the capabilities to weather the recent storm) through this incident (I'm assuming that some of the above blog reports are telling truth)?

Consider the impact of this incident:
- More than 30000 high paying IT jobs are at risk (many more secondary jobs)
- This can reduce the earning potential of Indian IT crowd due to glut of talents
- Many people will default on their home mortgage payment, car loan payment etc., and that will affect real estate industry and banks
- It will affect pricing of other IT companies and their earnings, stock prices and ability to acquire foreign companies.
- Impacts international trust on Indian management

Mihaylo · Post by **Mihaylo** » 09 Jan 2009 03:07

paramu wrote:Does anybody see an attempt to bring Indian economy down to its knees (it had all the capabilities to weather the recent storm) through this incident (I'm assuming that some of the above blog reports are telling truth)?

Consider the impact of this incident:
- More than 30000 high paying IT jobs are at risk (many more secondary jobs)
- This can reduce the earning potential of Indian IT crowd due to glut of talents
- Many people will default on their home mortgage payment, car loan payment etc., and that will affect real estate industry and banks
- It will affect pricing of other IT companies and their earnings, stock prices and ability to acquire foreign companies.
- Impacts international trust on Indian management

Possible, but who would be making this attempt? I mean, these guys defrauded in the billions (possibly), and there is no right or wrong time to bring it out and book him. The earliest the better in such situations.
I think during happy times everybody goes along and plays the game, even takes part in it. During not so happy times, somebody or a group of people decide that they want nothing to do with it and squeak and things come out into the fore. Nothing really sinister about the timing in my opinion. Enron came out when the US economy was just about in the dumps. During tough economic times it is hard to sustain fraud of such mammoth proportions

John Snow · Post by **John Snow** » 09 Jan 2009 03:14

"Behind every great fortune there is a crime" Mario Puzo ( opening in the Book God Father)

"Crime pays big time in India, because Crime owns the government" Spinster

ramana · Post by **ramana** » 09 Jan 2009 04:17

Will Commies and Regulations take over the IT/VTy in India?

Satya_anveshi · Post by **Satya_anveshi** » 09 Jan 2009 04:29

I am smelling that something along Dewang Mehta (former NASSCOMM chairman) may play up. That for me will confirm that a political party for which AP has always paid up royally duped Raju of his funds and he got screwed by them.

They will tapkao him sooner than later. That's one <strike>f@rt</strike> possibility.

ramana · Post by **ramana** » 09 Jan 2009 04:51

Deccan Chronicle has several pages devoted from lot of different angles.

Eg in 9 Jan 2009 issue, Business section:

Looks like UPA is ordering Raju's arrest while State is dithering.

Culpable directors

Biz Street
AN ACTIVIST friend has forwarded an exchange of mails that he has had with Harvard don, Mr Krishna Palepu, till recently an independent director with India’s version of Enron, Satyam Computers. While I am not at liberty to share the entire contents of the mails, the chilling disclosure by Mr Palepu is of the situation at Satyam being far ‘more subtle and complex’ than what the media has reported till now. Mr Palepu has also admitted that his association with Mr Raju and still before with Mr Ramesh Gelli, the fraudulent promoter of the failed Global Trust Bank, was driven by his identity instincts.

Most of the directors of Satyam were Telegus. So is the interim CEO who reportedly was an accomplice of Mr Raju in all his misdemeanors. There have always been indications that Satyam could not have climbed to where it did without political patronage, particularly that of former Andhra chief minister, Mr Chandrababu Naidu. There was clearly a regional lobby at play within Satyam, which had the sinister agenda of milking shareholder funds in Satyam to build the personal fortunes of the Raju family, his political patrons and close business associates.

Mr Raju was smart enough to realise early on that foreign investors would be more inclined to invest in technology stocks than in the more mundane businesses of textiles and construction that he attempted with no success earlier in his career. The Satyam scam was scripted many moons ago with the active connivance of the compromised board members and now, as it would seem, the complicity of no less a venerable firm than PWC.

Mr Raju’s crude attempts to ring fence his fellow directors and his political patrons by owning up exclusive responsibility for all the acts of cheating are already ringing hollow.
Mr Vinod Dham (possibly the lone non Telegu within Satyam’s top drawer) may have fathered the Pentium for which we respect him but he cannot trade that goodwill for his endorsement of Satyam’s misdeeds quarter after unholy quarter. The former IAS officer, Mr T R Prasad, is still hanging on to his board seat for reasons that investigative agencies ought to fathom.

The support that Mr Raju seems to be mustering on several blogs is primarily from Telegus. Was Satyam set up to enrich a particular sub caste or state? These are only some of the questions that need pursuing by all investigators.

Early signals

In September of last year, Satyam decided to abort its proposed Kolkata campus citing technical reasons centred on the lie of the land. Discerning analysts had sensed immediately that the excuse was specious. Seniors in Satyam have been looking around for jobs for months but they are not welcome in pedigreed technology companies owing to the ‘legacy’ that they carry. Every business head in Satyam would have known the accurate profit and loss situation in his or her vertical for years. As a recognised ‘cut-rate’ company, Satyam’s revenue model was always flawed.

They picked up the crumbs that were left behind by TCS, Wipro and Infosys. Equally to blame for Satyam’s spiral into hell are some MNCs which played Infosys and Wipro against Satyam to squeeze margins, prominent among them being GE.

There ought to be no mercy for such clients who were looking only for cost savings than quality or integrity.

Whine or truth?
So my info was correct that he was taking lot of blame on himslef and its not selling.

Satya, Can you elaborate on Dewang Mehta? I recall he died in Australia of heart attack and was too young to get one.

John Snow · Post by **John Snow** » 09 Jan 2009 04:59

Recently I was in India (oct), during that AP CM Rajasekhar Reddy got a Goonda and political hit man( contract Killer) who worked for him but was about to spill the beans, right with in the jail (high security).

So Raju is on the run because he will be done with.

Satya_anveshi · Post by **Satya_anveshi** » 09 Jan 2009 05:10

ramana wrote: Satya, Can you elaborate on Dewang Mehta? I recall he died in Australia of heart attack and was too young to get one.

Nothing much beyond seemingly unnatural death.

ramana · Post by **ramana** » 09 Jan 2009 05:13

John Snow wrote:Recently I was in India (oct), during that AP CM Rajasekhar Reddy got a Goonda and political hit man( contract Killer) who worked for him but was about to spill the beans, right with in the jail (high security).

So Raju is on the run because he will done with.

They might say he committed sucide just like the German Billionaire.

Prem · Post by **Prem** » 09 Jan 2009 05:47

Raju will be disposed of in Ken Lay tradition. The thing is some of the folks interacted with Mr Raju in Nyc 6-7 yeras ago and they found him a untrustworthy and a crook. Just talked to a friend and poor man said he is finnacially back to 80s because of SIFY.

vijayk · Post by **vijayk** » 09 Jan 2009 06:40

Surprise Surprise!!!

http://timesofindia.indiatimes.com/Busi ... 954193.cms

AP govt goes soft on Raju
9 Jan 2009, 0158 hrs IST, TNN
HYDERABAD: A day after Byrraju Ramalinga Raju admitted resorting to the worst corporate fraud in the country, he is still walking free. Reason:
there appears to be no political will in Andhra Pradesh to initiate criminal proceedings against him.

"We don't have any complaint against him. How can we move against him without any complaint?" said Hyderabad police commissioner Prasad Rao, a statement repeated by additional director general (law and order) Vivek Dube. Meanwhile, Ramalinga Raju's presence in Hyderabad was confirmed not only by his lawyer but also by the cops themselves who indicated that they were in touch with the former boss of Satyam. Raju's counsel S Bharat Kumar said his client was in Hyderabad. "As per the instructions given by my client, I am stating that he is very much available in Hyderabad and reports to the effect that he has fled the country are absolutely false," Kumar said. Airport and immigration officials in Hyderabad also confirmed that they had no information about Raju leaving the city.

Analysts said despite tough talk by chief minister Y S Rajasekhara Reddy, the political leadership is attempting to bail out the beleaguered former chairman of Satyam. "Chief minister Y S Rajasekhara Reddy is away in Chennai today. He has to take a call on what to do," a police official said.

Vipul · Post by **Vipul** » 09 Jan 2009 07:23

If Centre decides(SEBI action) then there is nothing that the state politicians can do to save him.

hnair · Post by **hnair** » 09 Jan 2009 07:51

Ramana,
Dewang Mehta's death in Australia was extremely inopportune and smelt of sun-roof lever. Per ITvity honchos at that time, he was an aggressive private sector organizer and more important, worked closely with GoI's IT related entities too. Apparently had a firm picture in his mind about where India should be after some years. A lot of such people seem to get extinguished under dubious circumstances in the last two decades in India, starting with Rajiv till Pramod. Not into conspiracy theories, but all the same their deaths were highly inopportune for India.

I dont know about individual politicos, but Satyam (or some of its group companies) did give some financing for current and past Union ministers as part of software industry organizations. I hear that IT Vity honchos had an uneasy meeting with PC last year over fringe benefit taxes. Fur flew etc etc. So post-2000, ITVity does have some say in politics, both at center and state. However from what I heard, GJman's peeve "GE and Infy nixed Parakaram" might not be possible if South Block decides to go to war. It is all Cabinet, however much Tom Friedman tries to spin about NRN's flying skills and Xray vision.

Singha · Post by **Singha** » 09 Jan 2009 09:52

my mtech juniors in iitk ran across the late Mehta in a trade show. they had no money and no passes to enter the premises, but he took them under his wing and told them to walk confidently behind him past every gate as part of his "assistants/entourage". it worked. he was a good man...

ramana · Post by **ramana** » 09 Jan 2009 10:40

One angle that has gone sub rosa is CBN's links to Satyam. Lets see what turns up there.

X-posted..

Ramana garu: Are you saying Raju is at no fault, and that he did not commit any fraud? It is so amusing to read his resignation letter where he says none of the other top guys know anything about the inflated numbers. It is not that somebody stole or misrepresented Rs.7.00, it is Rs7,000 crore; surely an entire army of people would have been involved.

No. He is at fault. But for him to take all the blame on himself, he is no Lord Shiva to swallow the halahal. He is covering for someone. Don't know who? Could be INC or CBN.

I heard a lot of black money was pumped into Satyam to keep it up as safe haven. Now its all vanished.

This is like the Lehman Bros vanishing while controlling the $60T Credit Default Swaps. It could have similar impact on Indian business houses.

Folks should search high and low to find any scrap of info to understand what happened. At risk is the political system in India for it feeds on black money.

Unfortunately Hyderabad has only one rag- Deccan Chronicle and its YSR supporter. So need to look at Telugu papers.

Singha · Post by **Singha** » 09 Jan 2009 11:31

aye I noted yesterday the sissified cnbc types at the satyam press conf
were just polishing their english and asking urbane questions. the telegu and tamil press were the ones asking the hard and "rude tone" questions.

how is Eanadu these days?

ramana · Post by **ramana** » 09 Jan 2009 11:39

Singha wrote:aye I noted yesterday the sissified cnbc types at the satyam press conf
were just polishing their english and asking urbane questions. the telegu and tamil press were the ones asking the hard and "rude tone" questions.

how is Eanadu these days?

Try these:

http://www.andhraguide.com/

Neela · Post by **Neela** » 09 Jan 2009 12:35

Looks like this is fun time for British reporters.

Satyam lifts the lid on Indian corporate fraud

Britain is possibly clinging to pharma and nothing else. Canary Wharf should have montly office space rentals for Rs100 now that the financial system has collapsed.

It time the english are reminded that they are pipsqueak and the money they looted from India will take them only so far .

Nayak · Post by **Nayak** » 09 Jan 2009 12:53

Satyam CFO Srinivas Vadlamani attempts suicide: Sources

9 Jan 2009, 1219 hrs IST, TNN
Print Email Discuss Share Save Comment Text:
HYDERABAD: Srinivas Vadlamani, the chief financial officer of Satyam, who is also allegedly involved in the IT company’s financial fraud,
attempted suicide early this morning, say market sources. He is, however, safe, sources add.

Disgraced former Satyam chairman Ramalinga Raju in his letter of resignation to Securities and Exchange Board of India (Sebi) and the company’s board of directors admitting fraud, had not absolved the CFO.

Vadlamani’s name is the only significant one missing from Raju's list of those who were ‘unaware of the real situation’ and the IT company’s wrong-doings.

Interim CEO Ram Mynampati in a press conference on Thursday said that Vadlamani had put in his papers. The decision on his resignation is to be taken in board’s meeting on January 10.

The CFO has been absconding from his home in downtown Malkajgiri for the last two days.

He is said to have attempted suicide in the house of some relative in Ameerpet area, sources said.

Confirmation from the police about the incident is still awaited.

amol.p · Post by **amol.p** » 09 Jan 2009 12:54

Vipul wrote:Of all the Indian IT majors Satyam had the most rigorous and thorough procedure of checking the authenticity of education and experience listed on the application and resumes of its new employees.
IIRC, they used to band all the under investigation employee's (post joining) into Green (Looks good and genuine), Yellow(Resume info checking clear and waiting confirmation on some minor queries) and Red Bands(Resume info fake and employee to be fired).
I had a friend who was on the yellow band as the refernce he listed was abroad and was not reachable on his mobile.

This is all false...few examples which I came around due to my cosuins who attended interviews of HP, cognizant, hexaware, satyam...
1] They were told you pay up 2 lacs in cash and we will ensure you get recruited
2] many people submit fake documenst they are never checked due to huge number of employees
3] Husband takes his wife or brothers to onsite through this links
4] I have a friend whoz all 4 in family work in one company and all four now onsite. None of them is computer/IT engineer. All made big time by paying the HR and got recruited there relatives.
5] HR people are making a hell out of money in IT companies upto mininmum 1 lac per candidate

milindc · Post by **milindc** » 09 Jan 2009 13:34

Did Raju own up only lesser of the two crimes?

It's a crime to show money in the books where none existed, which is what Raju said he did. But it's a worse crime to take out money that actually did exist. There's speculation that Raju was doing so in order to invest in other businesses such as real estate, and did intend to put it back in Satyam at some point of time, but possibly got into such a jam that he couldnt replenish the company's coffers.

The 3% margin question was put to the interim CEO Ram Mynampati at a press conference in Hyderabad on Thursday. He side-stepped the question.

I believe that this is situation. Raju started using Satyam reserves to fund his real estate acquisitions. This is definitely collusion between the Satyam bankers and Raju along with his ilk. Initially I was thinking that Raju was funding his RE operations by selling his stake in Satyam, but it now clear where he was getting the money. Just opposite our complex in Hyd, he has 140 acres of prime land, next to financial district, probably worth atleast 1400 crores.
The cooking of books is just smoke-screen, he stole the reserves.
I know for sure that a large MNC did due diligence of books at least 2 times (once in 2004 and other in early 2008), if it would have uncovered any discrepancy, there would have be rumors all around.

Singha · Post by **Singha** » 09 Jan 2009 14:16

The cooking of books is just smoke-screen, he stole the reserves.

that would satisfy the simplest explanation - occam's razor or what its called. old fashioned looting as opposed to new-age fraud/priory of sion stuff/kabalarians/scientologists

hnair · Post by **hnair** » 09 Jan 2009 15:07

Singha wrote:my mtech juniors in iitk ran across the late Mehta in a trade show. they had no money and no passes to enter the premises, but he took them under his wing and told them to walk confidently behind him past every gate as part of his "assistants/entourage". it worked. he was a good man...

Yep, I would believe that. He was a indeed good person

krishnan · Post by **krishnan** » 09 Jan 2009 17:07

Sebi, MCA ignored warnings about Satyam: Ex-secy

Sarma says that Satyam had come under the regulatory scanner in August 2002, when there were complaints about the faulty accounting practices.

Shivani · Post by **Shivani** » 09 Jan 2009 17:15

Don't buy, Satyam may go bankrupt: India Infoline
moneycontrol wrote: Nirmal Jain, CMD, India Infoline, said Satyam's business is not viable. "We won't buy any stock as the company can go bankrupt. I am surprised that trading in Satyam is still continuing."

He feels money was siphoned off from Satyam. "The Satyam fraud is likely to be a case of collusion, not negligence. It is difficult to believe that Ramalinga Raju was the only one involved in scam."

Here is a verbatim transcript of the exclusive interview with Nirmal Jain on CNBC-TV18. Also watch the accompanying video.

(Continued...)
SCENARIOS: What may come from Satyam board meeting
Reuters wrote: By Sumeet Chatterjee

HYDERABAD, India (Reuters) - The stand-in chief of Satyam Computer Services (SATY.BO) says the Indian outsourcing company faces a crisis of unimaginable proportions after it was revealed that profits had been falsely inflated for years.

Satyam's board meets on Saturday to consider various options to tackle the crisis.

It is not clear if chairman and founder Ramalinga Raju, who disclosed the fraud in a resignation letter on Wednesday, or his brother B. Rama Raju, Satyam's managing director, who also resigned, will be at the meeting.

(Continued...)
Satyam scandal rattles confidence in accounting Big Four
Reuters wrote: By George Chen

HONG KONG (Reuters) - A $1 billion fraud at outsourcing firm Satyam Computer Services (SATY.BO: Quote, Profile, Research) (SAY.N: Quote, Profile, Research), dubbed "India's Enron," has shaken investor confidence in the world's Big Four accounting firms, which have expanded rapidly in Asia despite a general shortage of qualified accountants.

Ramalinga Raju, founder and chairman of India's fourth-biggest software services exporter, resigned on Wednesday saying profits were falsely inflated for years.

"This is shocking. I can't even let my thoughts go in the direction that there is another Satyam somewhere," said Shailesh Haribhakti, executive chairman of BDO Haribhakti, a consulting and management services firm based in Mumbai.

"I have very high respect for PricewaterhouseCoopers PWC.UL who are their auditors, but it's incredible that such gross things existed and were not discovered," he said.

(Continued...)
Govt, regulator ignored warning about Satyam
ibnlive wrote: New Delhi: The Government and market regulators got enough warnings about the accounting fraud at Satyam Computers but they turned a blind eye, a former senior bureaucrat has claimed.

EAS Sarma, former secretary in the Finance Ministry, hinted that cheap land acquired with political patronage is at the root of the accounting scandal at Satyam. Sarma alleged that he had written to ministries and the Securities Exchange Board of India (SEBI) but was unheeded.

The trouble in Satyam, India’s fourth largest IT services vendor began in December 2008, when its chairperson B Ramalinga Raju’s proposal to acquire two real estate firms owned by his family was rejected by angry investors.

(Continued...)
SEBI team goes to Raju's house; house locked
Indianexpress wrote: Hyderabad: A Securities and Exchange Board of India (SEBI) team probing a financial fraud in Satyam Computer on Friday reached founder Ramaling Raju's house here, but returned as the premises was locked.

(Continued...)
Rivals wooing Satyam clients, employees: Forrester
The Hindu BusinessLine wrote:
NEW DELHI: Over half a dozen rivals of the tainted IT firm Satyam Computer have started exploring ways to take over the business from its various clients, a global technology consultancy firm said on Friday.

Satyam is likely to see its clients as well as employees deserting it soon due to the competitive wooing by rivals and top IT firms such as Infosys would continue to shore up their market share, analysts at Forrester Research said in a report.

(Continued...)

Shivani · Post by **Shivani** » 09 Jan 2009 17:25

Offshoring pace to be hit post Satyam scam: Forrester

moneycontrol wrote: Published on Fri, Jan 09, 2009 at 14:51 , Updated at Fri, Jan 09, 2009 at 16:32
Source : CNBC-TV18

Sudin Apte, Senior Analyst and Country Head, Forrester, believes employees as well as clients are going to desert Satyam for a range of factors like future uncertainty. "Clients are raising questions about continuity of Satyam as an independent entity. They are also raising questions about Indian governance and accounting, and overall auditing practices."

According to him, post the Satyam scam, clients are going to grow cold feet as they start looking at offshoring. "The pace of offshoring is surely going to take a hit. Many questions will come in during the evaluation process. Overall, the impact would be further slow growth. This is the last thing the IT industry wants to hear in a tough economic situation."

Here is a verbatim transcript of the exclusive interview with Sudin Apte on CNBC-TV18. Also watch the accompanying video.

Q: We have your report with us. You must have spoken to a lot of Satyam insiders, employees, as well as Satyam clients. What is the sense you are getting? Is it imminent implosion with the best candidates, best guys walking out for fear of their jobs, or getting wooed out? And the best customers as well moving out because mission critical businesses cannot be left to this kind of wait and watch?

A: I want to first make one sort of a disclaimer in a way. In the last 48 hours we have not been able to access any senior Satyam executive formally. So, really the report hasn't considered any Satyam interview.

But we have talked to some of the folks informally, some of the developers and team leaders et cetera as well, and we have talked several clients who also happen to be Forrester clients.

Our sense is that both employees as well as clients are going to desert Satyam for a range of factors. For employees future uncertainty all these factors. It is pretty obvious; all media have been talking about it. I really don't want to go into that. But that is something big.

If whatever I am hearing in the media today morning for example, even the credit card limits have been thrashed that is just going to trigger the employee exodus.

As far as clients are concerned, which is a more serious issue from an industry perspective, the sense that I am getting is that every interaction that I had with the US and European clients, every interaction ends up saying, is it an isolated incident or is this going to happen to a few more companies. So, people do have a lot of questions.

I hope that this is an exceptional situation and Satyam is the only company. But clients are surely concerned, and raising questions about continuity of Satyam as an independent entity, clients are raising questions about Indian governance and accounting and overall auditing practices. So, there are issues on the client side.

Q: If you could put your experience behind what is going on, I am just trying to get yours and Forrester's view on this, a) If I were sitting in the US, has the big, overall India outsourcing story hit a roadblock or a brake or a speed breaker, b) there is a certain belief that people who are with Satyam will move to Infosys or TCS or Wipro. What about moving to an EDS or Oracle or Sapient companies that they are close to and used to dealing with?

A: Absolutely. Let me go one by one. On the overall India outsourcing story, there is a bit of goods news on that front. There is no alternative. I'd said in my earlier reports as well TINA i.e. There Is No Alternative is going to help India because there are no other locations that can offer 60,000-100,000 people for building centers. So, even if you look at larger multinational companies or firms like TCS don't have 50,000 or 100,000 people in other locations. So, just demographic is going to help India going.

But now we have a situation where clients are going to grow cold feet as they start looking at offshoring and there is no alternative. The pace of offshoring is surely going to take a hit; much more questions will come in during the evaluation process. And overall I think the impact would be further slow growth. This is the last thing the industry wants to hear in a tough economic situation for overall Indian IT, I would say.

Swapping of clients there is no common answer. There are lots of areas that Satyam operates in, for example engineering services. Now the top one or two companies in India may not be the best suited vendors for that work. So, to whom the work would shift to is a function of who is the incumbent vendor in that account in addition to Satyam because in that case those companies will know the client, client processes, work, business, domain et cetera.

So, who is the incumbent vendor is a key question. The second question is that do they have the bandwidth to offer those high-end SAP capabilities or high end engineering services or auto and aero capabilities. These are going to be deciding factors where they switch to.

The larger clients of Satyam really are in a fix. They cannot really think about ramping up 500-600 ODCs overnight. So, the size of the client and the incumbent vendors and the domain expertise are a variety of factors that are going to play here. I don't think we can say rampantly that all Satyam clients will move to TCS or Infosys.

Vipul · Post by **Vipul** » 09 Jan 2009 19:22

IT vendors get ‘feelers’ from Satyam clients.

The nervousness among clients of Satyam – following a massive accounting fraud – is now apparent.

Even as Satyam customers officially continue to be in a wait-and-watch mode, many IT vendors claim that there has been a rush of calls from some clients who are keen to explore the possibility of migrating projects.

In effect, behind-the-scene exploratory talks have picked up pace just a day after the shocking disclosure on financial irregularities by the Satyam promoter, Mr Ramalinga Raju.

When contacted by Business Line, a Ford spokesperson said, “All I can tell you is that we are currently evaluating the situation and not prepared to make any comments at this time. Please note though that as a matter of policy we never discuss contract arrangements with our suppliers.”

FIFA said it is monitoring the situation related to Satyam; Satyam provides services of technical support to FIFA.

“At this stage and until we have more information, it is too early for FIFA to make any further comments on the matter. We trust you will understand our position,” FIFA said.

However, not all clients of Satyam are in ‘wait-and-watch’ mode.

A CEO of a mid-sized Delhi NCR company pointed out that it has already replaced Satyam in 2-3 accounts immediately after the aborted Maytas bid, and is now in “serious dialogue” with 6-7 other clients in the aftermath of Wednesday’s revelations.

“Ironically, some of the application work that Satyam has been doing in the area of compliance and security is the one that is being re-looked at,” the official said.

Understandably, the vendors were hesitant to divulge the name of clients who are out in the market scouring for options.

A top official of a Pune-based firm said that he had received calls from three shared customers – one based in Singapore and two in US including an insurance company.

“These customers were mulling legal recourse and also wanted to know if we could take over some of the work. While we have said that we will technically be in a position to take over, we also advised them not to rush things and wait for more clarity,” he said.

Another Director-level official of a leading global IT firm which has a significant delivery base in India, said that the clients had become wary just after the World Bank episode.

“It had been brewing for a while although the magnitude took everyone by surprise. So far our teams were more on a stealth marketing mode, waiting for customers to indicate their willingness to move; but now every customer has started working proactively on back-up plans,” said the official, who did not wish to be named.

According to analysts, in every IT engagement, there are two clauses under which the contract can be cancelled; ‘termination for convenience’ and ‘termination for cause’.

Customers of Satyam could now invoke the latter; in which case the engagement could be terminated immediately without serving a notice.

A mid-sized Mumbai based company, which recently lost out to Satyam on a $15 million deal, is now confident of clinching it back.

Meanwhile a top-tier Indian vendor says it has been approached by three telecom clients of Satyam to transfer the engagement.

“These are telecom clients who have a sub $2 million deal, in the area of maintenance and testing. How far we are able to close the deal depends on the urgency from the clients’ end,” it said.

Market observers note that although clients would want to migrate to other IT vendors, they would prefer to engage with those companies with whom they already have some engagements going.

John Snow · Post by **John Snow** » 09 Jan 2009 20:13

From the days of Mundra, TTK, Jeep, Cement (Antulay) Fodder (lallo) Stamp, SEBI, etc etc

"India a land of million opportunities for Scams to go scott free"

My respect for Dawood has reached to the respect level of our politicans, atleast dawood bahi is brick and mortar, not vapour ware...

sum · Post by **sum** » 09 Jan 2009 20:15

http://timesofindia.indiatimes.com/No_s ... 956699.cms

Satyam staff not to receive salaries for 2 months: Company email to staffers
9 Jan 2009, 1628 hrs IST, PTI
Print Email Discuss Share Save Comment Text:
HYDERABAD/NEW DELHI: Satyam Computer on Friday announced holding back employees salaries for two months, even as rumours were rife that the
company might lay off close to 15,000 workers in the coming days.

The offices of Satyam Computer were rife today with the talks about forthcoming pink-slips at the company, which needs over Rs 500 crore every month just to meet its staff costs and has admitted that its cash position was not encouraging.

Employees said they have received an email saying the company would hold back salaries for two months and asked staffers to bear with it.

However, the company spokesperson declined knowledge of any such email and the issue would be looked into.

Even as the company spokesperson denied any layoff plans as of now, the rumours put the estimated job cuts at close to 15,000 by the end of this month.

Employees at the company said on condition of anonymity that they were hearing about imminent lay-off of people who were sitting on the bench or were close to completing their assigned projects. Besides, those being retained would be asked to take substantial salary cuts, they added.

At the same time, global HT consultancy firm Hay Group's Practice Leader Mark Thompson said that employees would suffer the most from the fraud.

Global HR consultancy firm HayGroup's Practice Leader Mark Thompson said: "Based on past experience ... as with Enron, Worldcom and the Mirror Group, it is likely to be the employees who will suffer most from the fraud perpetrated by their bosses."

In early 2000, the collapse of energy trader Enron had left thousands of people out of work, another 8,500 had lost their jobs at accounting firm Arthur Andersen; and Tyco eliminated 15,000 employees in February.

Analysts at technology research firm Forrester said employees and clients would soon desert the company amid competitive wooing by the rivals.

The research firm added that it has already been consulted by over half-a-dozen rivals of Satyam on competitive strategies to be adopted to take over the business from the clients of the beleaguered IT firm.

Satyam on Wednesday made a shocking disclosure of fudging of accounts by its founder Ramalinga Raju, who then quit as chairman, leaving an uncertain future for the company and its 53,000 employees.

Raju, in a statement on Wednesday, said Satyam's profits had been massively inflated over many years but no other board member was aware of the financial irregularities.

The timing of this news is the most unfortunate part about it given the fragile state of the global economy, Hay Group's Thompson said.

The scandal will damage corporate India's reputation, may have implications for the whole BPO and IT Services sector and would certainly give some "hotheads in the US a little more ammunition to use against the logic of outsourcing to India," Thompson said.

"However, there will not be a long term impact on the employer-employee relationship. Instead, we may get tied up with a series of reviews into corporate governance and a host of new regulations attempting to prevent this kind of thing from happening again," Thompson added.

Another global staffing services firm Manpower said at this point of time "employees should assess their current skill sets and explore the opportunities in sectors showing positive hiring intent like energy, telecom and mining."

Executive search firm Headhunters India's CEO Krish Lakshmikanth has said the company might lay off over 10,000 employees by the next month as it has little cash to pay salaries.

"It is most likely that Satyam will cut 10,000 jobs next month as the company is left with no cash to pay the salaries. The current fiasco is likely to put pressure on salaries, which may reduce by 10 per cent due to the surplus of about 20,000 people in the jobs market," Lakshmikanth said.

Lakshmikanth said till Tuesday evening there were about 7,800 Satyam employees who had posted their resumes on job sites and by Wednesday afternoon, it rose to 14,000.

Satyam's interim CEO Ram Mynampati yesterday said the company has taken care of the salary for December, but its liquidity position was not encouraging.

When contacted, IT-BPO employees union UNITES said, "We are in touch with the senior and top-level management of Satyam, all kind of rumours are doing the rounds but we still do not have any clarity on the issue."

"It is unlikely that there will be any layoffs as the new management is trying to portray that all is well in Satyam. Moreover, this is election year, even if the company do not have money government might chip in to rescue the employees," UNITES General Secretary Karthik Shekhar said.

According to the latest Manpower Employment Outlook Survey hiring intent in IT & ITeS sector has gone down drastically this quarter, compared to the last quarter, but the space is showing a positive hiring intent, with net employment outlook of 23 per cent for the first quarter of 2009.

"In India IT and ITeS sector has been a low-cost and high -quality player and will surely emerge big again after the crisis," Manpower India added.

Meanwhile, UNITES India, a union of ITeS professionals, has warned that over 50,000 IT professionals in India may lose their jobs over the next six months as the situation in the sector is expected to worsen due to the impact of global meltdown on the export-driven industry.

Added: the comments seem to indicate its usual ToI(let) rumour mongering...

Vipul · Post by **Vipul** » 09 Jan 2009 20:19

Scamster Raju continued to milk the reserves till the last possible moment.Only when the available cash figure fell below the Operating expenses level(Salary/Utilities/Rent) did he confess.

negi · Post by **negi** » 09 Jan 2009 20:20

Hmm.. it seems as if al GOI schemes== scams , in this case the SEZ thingy needs to be monitored closely. I have been always amazed by the large chunks of land which INFY manages to get for its facilities.

Vipul · Post by **Vipul** » 09 Jan 2009 20:39

Tamil Nadu shuns IT industry; says invest in brick kilns.

Tamil Nadu, the country's third largest IT services exporter, on Friday said it no longer needed investments in the sector and instead asked non-resident Indians to pump in money in manufacturing, be it even for brick kilns.

"There is no scope for IT industry in Tamil Nadu. I am telling you the facts. Don't invest in the sector and waste your money," state Power Minister Arcot N Veerasamy told an interactive session with NRIs and Persons of Indian-Origin at the Pravasi Bhartiya Divas here.

The economic meltdown in the West has triggered the collapse of the IT services industry in the state, he said, noting that "over 50 per cent of software companies... (in the city's IT corridor) have closed down after the incident."

"I am telling you people (NRIs) don't invest in the IT sector. If you want, you can invest in other sectors like steel, cement, automobiles, electronics hardware and even brick industry," he said.

The IT industry has lost its scope, the Minister said, leaving the bureaucrats embarrassed and possibly affecting investment opportunities.

"The state does not need any more investments in the IT sector. The entire industry has been affected after the American incident (global financial meltdown)," he said.

He further said the industry was flourishing four years back, but now it has lost its scope.

The IT portfolio is held by Chief Minister M Karunanidhi in the state and Tamil Nadu has always been in the forefront in reaching out to almost all the software companies in the world to set up hubs in the state.

Former Union IT Minister Dayanidhi Maran played a major role in bringing more software industries to Chennai and other cities in the state.

negi · Post by **negi** » 09 Jan 2009 20:44

"I am telling you people (NRIs) don't invest in the IT sector. If you want, you can invest in other sectors like steel, cement, automobiles, electronics hardware and even brick industry," he said.

John Snow · Post by **John Snow** » 09 Jan 2009 21:12

How is the relationship between Raju and Naidu (especially CBN) clan?

There is caste angle as in any politics in India.

Raju is Kshatriya

CBN is a Naidu ( Kapu/Reddy clan)

NTR (clan) is a Kamma.

Ok there are only very minor differences here but big egotistical gulfs.

Raju, Reddy (Velamas) are traditional rulers (ruling class)

Kamma and Naidu are more farming, commoners.

So there are under currents of caste politricks in these scamester Shenanigans.

Singha · Post by **Singha** » 09 Jan 2009 21:16

GOI has demobbed the satyam board - all Raju cronies and asked them not to hold any meeting tomorrow.

GOI will constitute a new 10 member board in a week to caretaker the company and lead the investigation.

many bank employees must be part of it, if false bank statements were being presented to PwC.

Raju is missing and his home is locked up. the police are alleged to be looking for him.

krishnan · Post by **krishnan** » 09 Jan 2009 22:18

Sathyam ka sathyanash ho gaya

John Snow · Post by **John Snow** » 09 Jan 2009 22:42

We have a problem with naming Indian companies and products

Satyam does Jhuta
Arjun Obese says army, Heavy Metal says DRDO
Aakash Stays on ground mostly says IAF, Will touch the sky says DRDO
Prithvi Goes up in air on liquid says IA, It’s a hit says DRDO
Nag Hiss and forget class missile says DRDO.

sunilUpa · Post by **sunilUpa** » 09 Jan 2009 22:44

Ramalinga Raju surrenders before police

Disgraced former chairman of Satyam Computer Services [Get Quote] B Ramalinga Raju late Friday evening surrendered before Andhra Pradesh's Director General of Police S S P Yadav, according to a police spokesperson

SRoy · Post by **SRoy** » 09 Jan 2009 22:56

ramana wrote:Deccan Chronicle has several pages devoted from lot of different angles.

Eg in 9 Jan 2009 issue, Business section:

Looks like UPA is ordering Raju's arrest while State is dithering.

Culpable directors

In September of last year, Satyam decided to abort its proposed Kolkata campus citing technical reasons centred on the lie of the land. Discerning analysts had sensed immediately that the excuse was specious. Seniors in Satyam have been looking around for jobs for months but they are not welcome in pedigreed technology companies owing to the ‘legacy’ that they carry. Every business head in Satyam would have known the accurate profit and loss situation in his or her vertical for years. As a recognised ‘cut-rate’ company, Satyam’s revenue model was always flawed.

They picked up the crumbs that were left behind by TCS, Wipro and Infosys. Equally to blame for Satyam’s spiral into hell are some MNCs which played Infosys and Wipro against Satyam to squeeze margins, prominent among them being GE.

There ought to be no mercy for such clients who were looking only for cost savings than quality or integrity.

Spot on and that what I said few posts ago. I'll wager levels down upto senior project managers knew this.

Nayak · Post by **Nayak** » 09 Jan 2009 23:17

Is hamaam mein sab nangey hain mian !!!!