Indian IT Industry

negi · Post by **negi** » 09 Jan 2009 23:31

^

Oh yes.. aur Nanga Nahayega kya aur Nichodega kya

Yerna · Post by **Yerna** » 09 Jan 2009 23:38

John Snow wrote:
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.

Tauba tauba... a Kapu son in law for a Kamma politician?? CBN is Kamma too inspite of his Kapu like last name.

John Snow · Post by **John Snow** » 10 Jan 2009 00:11

That brings to mind Arudra ( telugu poet and Tollywood song writer of 50 till late 80s) said in Koola namma padaalu
(couplets,2 and 4 verses)

.....

Kaapu vade reddy
Garika poche gaddi
O koonalamma

Ardhat

Kapu is same as reddy
as much as grass is to hay!

Vipul · Post by **Vipul** » 10 Jan 2009 00:56

Kiran Karnik may be appointed as one of the directors at Satyam.

The government has sounded out the former chief of software industry body NASSCOM Kiran Karnik among other luminaries to join the board of Satyam Computer Services, a person familiar with the matter said.

Earlier on Friday, it sacked the three-member Satyam board, and announced it would appoint a 10-member board of eminent people to run the company, which has been reeling since disclosures of financial irregularities by its founder B Ramalinga Raju, which quit as chairman earlier this week.

The government is yet to announce the names of the board members, but the person who, asked not to be named, said names being considered included foirmer SEBI chief M Damodaran, Jerry Rao, who ran Satyam's rival mPhasis before it was acquired by EDS and angel investor Saurabh Srivastav. None of these people were immediately available for comment.

The government will not appoint executives of Satyam's rivals such as Infosys, TCS or Wipro or anyone directly in the IT industry to this board because of concerns about conflict of interest. Appointment of a new board was seen a key to restore confidence in the company, and by extension to the rest of India's IT sector.

AshokS · Post by **AshokS** » 10 Jan 2009 01:28

I met Krian Karnik at the 2008 Columbia Business School India Forum. He gave one of the key note addresses, very impressive person - he had a good handle on the China threat to Indian services, will need to find my notes from that session.

vishnua · Post by **vishnua** » 10 Jan 2009 03:42

May be this belongs to Nukkad. In Rayalaseema Naidu is Kamma. Only in Coastal Andhra Naidu is kapu. In Telnagana some of Kapu's are also Reddy's.

ramana · Post by **ramana** » 10 Jan 2009 03:56

Satyam scam takes political twist

Pioneer News Service | New Delhi/Hyderabad

Raju links come into focus

The Satyam scandal is turning out to be more than a corporate scam. As hunt for the disgraced Ramalinga Raju continues for jeopardising the livelihood of some 50,000 employees and squandering shareholder investments running into thousands of crores, his political links have triggered a major blame game among parties.

The man who until recently was a poster boy of Andhra Pradesh and held in esteem by corporate India, has overnight become a pariah. Those known to have courted the former Satyam chief for years have completely disowned him now

While the BJP, Telugu Desam and the Left have accused the Andhra Government and State regulatory agencies for their failure and complicity, the State Government has in turn pointed the finger at Telugu Desam.

Demanding a probe by a Central regulatory agency into the financial irregularities committed by the software company, the BJP on Friday said a scam of such proportions was not possible without the “support” of SEBI, MCA, Planning Commission and the Andhra Pradesh Government.

“There are scams coming out of a scam....Was the Government sleeping when it occurred? Even the Planning Commission did not take any action. This shows high mismanagement of the economy," senior BJP leader Murli Manohar Joshi said at a Press conference.

Joshi accused Andhra Chief Minister YS Rajasekhara Reddy of doing a flip-flop on the issue by first praising Satyam and its founder Ramalinga Raju and then backtracking.

“On what basis did he give them a clean chit?” Joshi asked, adding, “Has this company also been educating politicians like Enron did?''

Demanding a “dispassionate and ruthless” investigation of the scam, Joshi said, “The role played by auditing companies, rating agencies, SEBI, Ministry of Company Affairs, banks and financial institutions and independent directors should be examined.”

He said though E Sreedharan, who pioneered Delhi Metro, had informed the Planning Commission that Raju was diverting the route of the Hyderabad Metro towards areas where he owned land, no action was taken.

The party further demanded a probe by a Central agency into the fiasco and the role of SEBI, MCA, Income Tax Department, stock exchanges, Registrar of Companies & audit firms involved in allowing the “fraud” to continue for years together. The BJP also asked the Prime Minister to issue a statement on the matter.

Meanwhile, several opposition parties in Hyderabad demanded Raju's immediate arrest. They have also targeted the Maytas firms own by his sons. The opposition, including the TDP, Left, TRS and the BJP have demanded information on major contracts given by the Government to Maytas Infrastructure during the current Chief Minister's tenure.

Identifying the projects, the opposition alleged that, awarding the Rs 121 crore road project in YSR's home district Kadapa, Rs 1550 crore port project at Machchlipatnam and several irrigation projects to Maytas proved the Government's complicity with Raju.

In a stinging criticism, Telugu Desam chief N Chandrababu Naidu, who as Chief Minister earlier is said to have promoted Raju and Satyam, accused Reddy of drowning the IT sector in the State into corruption and irregularities.

"The TDP Government had made Andhra Pradesh people proud through the IT sector, but under the corrupt Congress Government, the same IT has become a cause of shame for the people of the State," Naidu said.

State CPI Secretary K Narayana demanded that the disgraced Satyam chief should be immediately arrested. Addressing mediapersons in Tirupati on Friday, he said the State Government should take back the land offered to Satyam and Maytas for their projects. He also found fault with the Government in awarding major contracts to Maytas, including the Hyderabad Metro Rail project.

"When Sreedharan of Delhi Metro Rail Corporation suspected foul play in the Hyderabad Metro Rail contract to Maytas, this very State Government had threatened to take legal action against him, instead of acting against Maytas", Narayana pointed out.

BV Raghavulu of CPI(M) said the fraud was an attempt to turn black money into white. Prajarajyam chief and film star Chiranjeevi joined the anti-Chief Minister chorus and said the scam was a devastating blow to Telugu self respect.

Responding to criticism, Reddy stoutly denied his Government was trying to shield Raju and coming in the way of his arrest. "We have ordered an independent inquiry by the CID and the law will take its own course against him," the Chief Minister said. Launching a counter-attack, Reddy accused the TDP chief of having patronised Raju when Naidu was the Chief Minister.

I saw YSR on Zeenews last night. He looked very harried. Satyam scam has potential for multiple fallouts. But will be mainly political Panipat for TDP and INC. They will have to find an IAS babu(s) scapegoat and fix it on him or them and send Raju to the nether world.

Whoever forced the issue wants to make sure AP is not a factor in next elections.

Its like the Lehman Bros meltdown. Will have multiple victims.

ramana · Post by **ramana** » 10 Jan 2009 05:01

I believe the SEBI is asking for audit of all the high flying companies that form the major indexes.

vijayk · Post by **vijayk** » 10 Jan 2009 07:30

Where are thou Sherlock Holmes when we need you !

http://timesofindia.indiatimes.com/Saty ... 958281.cms

Satyam's bank statements go missing

NEW DELHI: The skeletons just won’t stop tumbling out of Satyam’s cupboard. It now turns out that B Ramalinga Raju and his associates may have spirited away bank statements of the company that hold clues to the massive fraud perpetrated by them.

The Hyderabad office of Registrar of Companies did not find the statements at any of the three Satyam offices in and around the city raided in the morning. The offices have since been sealed.

Companies have to keep bank statements for the current and preceding years at registered offices. It is suspected that the files vanished as they would have given away the fraud, rendering Raju and his accomplices liable for immediate penal action.

The ROC is likely to recommend a comprehensive investigation by the Serious Fraud Investigation Office (SFIO), which may be accepted as early as next week. There is already enough evidence to make a foolproof case for an SFIO probe, sources in the corporate affairs ministry said.

Investigators have already found enough evidence to make a foolproof case for an SFIO probe, sources in the corporate affairs ministry said. The Registrar of Companies (ROC), in its report, is also likely to point out that the company violated the requirement under the rules to keep the statutory documents at the headquarters.
As the investigation against Satyam gathers momentum, the Institute of Chartered Accountants of India has initiated disciplinary proceedings against the company’s auditor, PriceWaterhouse.

Sources said the SFIO team would be multi-disciplinary, drawn from Sebi, RBI, CBI, police, customs, revenue intelligence, besides forensic and banking experts.

ramana · Post by **ramana** » 10 Jan 2009 08:33

An e-mail from a informed person...

This is my take on Satyam saga... you can post it on BR if it adds value

I was one of the early employees of Satyam (emp id < xxx) and worked for that organization for 10 yrs till 2004. I met Mr. Raju 3-4 times on one on one where we alone waiting for a plane or went for a lunch with his family.

My personal assessment is that he is a good person. But he is a shrewd businessman and very ambitious at that.

There are many raju's in the finance/admin areas who work as a parallel entity within Satyam. I strongly believe that very few Satyam leaders aware of the financial fraud. I think this is how it might have happened.

Most of the profits and sales numbers are accurate. I worked as a program manager at Satyam and the profit margins of >20% is enforced throughout the organization. I believe these funds are used as collateral (of course informally) to raise funds to invest in Satyam/Maytas RE ventures. It would be impossible for Maytas to acquire ~6000 acres of land . I am sure at least ~500-1000 acres of it will be in Hyderbad as part their plans to encash the recent RE rush.

When the RE bubble burst, the banks must have forced Rajus to pay for their temp loans thus vanishing Satyam reserves. I know many people (political mostly) who invested big in these ventures... and are forcing Raju to return their funds to use them in the upcoming elections...

One estimate is that Congress is planning to spend 10Crs per Assembly elections and 30Crs per Parliament constituency. Another rumor was that YSR offered 1000crs to TSR. And YSR is expected to support congress campaign in Karnataka and Orissa as well.

-----------------
Take it as input to the puzzle.

What strikes me is that Raju is quite informed to take on this fraud aarop on himnslef. There could be some thing more catastrophic lurking beneath all this.

John Snow · Post by **John Snow** » 10 Jan 2009 08:42

One estimate is that Congress is planning to spend 10Crs per Assembly elections and 30Crs per Parliament constituency. Another rumor was that YSR offered 1000crs to TSR. And YSR is expected to support congress campaign in Karnataka and Orissa as well.

This why the most corrupt state goverment in the south is AP.

I have posted how YSR has to pay royalty for CM ship to Sonia G president of congress.

Al this started with Chanda Reddy aka Chenna Reddy when only AP and Karnataka (devraj Urs) were bastion of Congress after 1977 rout.

AP is the most corrupt with all its CMs doing super GUBO to Delhi.

Not a single project of Brick and mortar came AP, CBN made billions with IT vapor ware.

svinayak · Post by **svinayak** » 10 Jan 2009 08:54

John Snow wrote:
One estimate is that Congress is planning to spend 10Crs per Assembly elections and 30Crs per Parliament constituency. Another rumor was that YSR offered 1000crs to TSR. And YSR is expected to support congress campaign in Karnataka and Orissa as well.
This why the most corrupt state goverment in the south is AP.

I have posted how YSR has to pay royalty for CM ship to Sonia G president of congress.

Al this started with Chanda Reddy aka Chenna Reddy when only AP and Karnataka (devraj Urs) were bastion of Congress after 1977 rout.

AP is the most corrupt with all its CMs doing super GUBO to Delhi.

Not a single project of Brick and mortar came AP, CBN made billions with IT vapor ware.

MP from Chitoor AP is the biggest Liquor baron in Bengaluru.
Reddys are land barons around Bengaluru.

But if YSR wants to fund in Karnataka he will find many opposition.

hanumadu · Post by **hanumadu** » 10 Jan 2009 12:06

Acharya wrote:One estimate is that Congress is planning to spend 10Crs per Assembly elections and 30Crs per Parliament constituency. Another rumor was that YSR offered 1000crs to TSR.

At 300 assembly seats and 45 parliament seats that comes out to Rs 4350 cr. I don't believe any party in India has that kind of money. For comparision, Congress is said to have given 5 lakhs to some of its MLA's as campaign funds during the last election.

--hanumadu

yvijay · Post by **yvijay** » 10 Jan 2009 12:25

^ Are you kidding me? In the last panchayat elections, candidates in some villages surrounding big cities like Hyd and Vijayawada spent over 1 crore. The source of income seems to be real estate boom.

R Vaidya · Post by **R Vaidya** » 10 Jan 2009 12:56

Impending polls may have pushed Satyam off cliff

http://www.dnaindia.com/report.asp?newsid=1220269

R Vaidya

vsudhir · Post by **vsudhir** » 10 Jan 2009 17:49

R Vaidya wrote:Impending polls may have pushed Satyam off cliff

http://www.dnaindia.com/report.asp?newsid=1220269

R Vaidya

Well written, RVaidya saar.

Sadly, the southern part of the country has fallen into very hard times indeed - corruption and misgovernance have spiralled out of control. It was ok as long as netas ate money but development - infrastructure, industry etc - was allowed to happen. So the netas took money for enabling projects. But the model now seems to be to play spoiler and make money. That is worrisome indeed.

Perhaps thats why Ratan tata was so happy to switch to Gujrat. Few, if any, IOUs of this sort perhaps. We reeeeally need more Modis and Nitish kumars for any meaningful development to get done!

vijayk · Post by **vijayk** » 10 Jan 2009 19:34

vsudhir wrote:
R Vaidya wrote:Impending polls may have pushed Satyam off cliff

http://www.dnaindia.com/report.asp?newsid=1220269

R Vaidya
Well written, RVaidya saar.

Sadly, the southern part of the country has fallen into very hard times indeed - corruption and misgovernance have spiralled out of control. It was ok as long as netas ate money but development - infrastructure, industry etc - was allowed to happen. So the netas took money for enabling projects. But the model now seems to be to play spoiler and make money. That is worrisome indeed.

Perhaps thats why Ratan tata was so happy to switch to Gujrat. Few, if any, IOUs of this sort perhaps. We reeeeally need more Modis and Nitish kumars for any meaningful development to get done!

It is rumored that YSR made 28000 crores in the last 4+ years of rule. Not sure if that number is after paying his commission to Sonia or before.
The addition of 7000 crores from Satyam would make that 35000 crores. May be "7" is his lucky number. He loots only in 7 multiples.

His son started a newspaper to campaign for CON party and crush TDP. They promised to give the newspaper free for a year if anyone shows the proof of subscription cancellation of popular Eenadu (anti-con party news paper which supports TDP).

Muppalla · Post by **Muppalla** » 10 Jan 2009 20:31

Vaidya, that was fantastic post.

Regarding money in elections, AP might be on the top of the list. In 2004 LS elections, Vijayawada congress candidate spent to the tune of 80 crores for just one constituency. He is the chairman of Lanco Group of Industries and are very big in real estate and infrastructure projects.( a billion dollar company). http://www.lancogroup.com/About/founderchairman.html

There will be NO vacancy in any of the parties (Congress, TDP, TRS, PRP, Nava Telangana) if the candidate for Assembly cannot spend at least 2 crore for assembly and the minimum for LS is 10 crore. It is same money even SC and ST candidates can spend. No exaggeration!!.

The real estate corruption between promoters/builders and political parties does not affect common man and these lands are getting value only due to investments/development and otherwise they are purely wastelands. All the surrounding ares of Hyd are not fertile lands and the land was dead cheap before development. The corruption is by not looting anyone. The party in power decides to lay a road of 6 lanes freeway between airport and some city via some areas as soon at it knows that it will win the elections. The information is only told to near and dear. These near and dear quitely purchases the lands at Rs 2 an acre. The party anounce the decison after all the purchases are done. The land now becomes Rs200000000000000 an acre. Now the companies like Mytas who has political clout sells a portion to next rung of real estate people and returns the portions to politicians and gets favors like infrastructure projects. Once the projects are announced, the land value goes up further and using the land value, they get money from public/investors to the tunes of thousands of crores. Inspite of corruption, the development did happen. No common man is affected as these lands are useless lands if there is no large scale capital. The whole deal is unethical but there is no black money either. This is how Hyderbad became Greater Hyderabad (larger than Shangai in terms of area). The center of Hyd shifted from Nampally area to Kukatpalli (current traffic grid).

The discussion is OT.This whole discussion will take this thread to trash. I will try to get back to topic. Some of the information that I gathered via phone calls:

* The problem that Satyam created has ripple effects to other companies. Becasue of a large pool of Satyam employees who are desperate from new jobs availabe over night, the hiring spree of cheap but proven talent is available in the job market. This is becoming difficult for the prospective job hoppers. In one case a company pulled back the appoinment letter as is is getting a similar resource from Satyam cheaper. In short, salaries are going down. This is good and bad.

* The big edible oil company and the likes are going to hire scores of Satyamites and might fire the high cost employees of their folks. This is overall reduction in salary bill.

* The customer base of Satyam shifts to TCS, Infy, cognizant and wipro. These companies will grow suddenly.

* Even if there is dent on India's corporate image, where will the goras go in this economic meltdown. They got to cut costs and they will still go to India but will whine a lot as though they had the greatest corporate ethics.

* By the way the section of PWC that audited Satyam is actually Anderson consulting that was purchased by PWC after the fall of Enron. PWC was to cave in now.

Some positives of the Satyam:

* It is Satyam which introduced emergency response systems in big cities. The 108 call and immediate ambulance response system is the gift given by Satyam to hyderabad and other cities.

* Sify for internet browsing and VOIP calls were very efficiently managed

* TV-9 news media is also partially owned by Satyam and is a growing media house. They initally started only Telugu and now spreading to other languages.

Political fallout - Rajus (Kshtriyas) are concentrated mainly in West Godavari and North Andhra states of Vijayanagaram, Srikakulam, Visakhapatnam districts of AP. No matter what Ramalinga Raju did, they will be solidly behind him in thick and thin. Chiranjeevi's party is expected to sweep this area and if Rajus also get angry with TDP and Congress, one can imagine a no-contest here. This is the talk of the town and there are no stats to backup. YSR government will be on the back foot and the timing was not good for him and his party. A coverup is expected.

John Snow · Post by **John Snow** » 10 Jan 2009 22:24

Muppala garu, you are making the same mistake JL Nehru, "Not even a blade of grass grows....." hence a waste land.

The waste land that you talk about is all govt land which is allotted at throw away price or no price.
Honestly as R Vidaya ji indicated, this is scam from the word go.....

underl UCLA you cant own more tha 650 sq yards, yes agreed most of the land we are talking is agricultural or dry lands for which under LCA ( not Light Combat Aircraft, but Land ceiling Act of famous 1977. IG passed) could be max of 60 hectares IIRC.

SO this tamasha of a company then going round about way.

YSR must have made money in converting Sarathi Studios land in AMeerpet owned by Akkineni family...

Man I should have stuck to politrics I would have been hit!

vsudhir · Post by **vsudhir** » 10 Jan 2009 23:02

India hears calls for Satyam bailout (IHT)

Huh?

This 'news item' is mischief, pure and zimple.

GoI will bailout banks because depositers interests and paramount and bailout PSU MFs like UTI becoz they were sarkari to start with but won't touch stockholder losses in pvt firms with a barge-pole. Doesn't make any sense onlee.

Unkil has bailed out its badboys, so loyal yamriki press wants to paint the spread of the virus to other economies as well... WHen all are equally bad, unkil can regain moral high ground again.....

Muppalla · Post by **Muppalla** » 10 Jan 2009 23:22

John Snow wrote:Muppala garu, you are making the same mistake JL Nehru, "Not even a blade of grass grows....." hence a waste land.

The waste land that you talk about is all govt land which is allotted at throw away price or no price.
Honestly as R Vidaya ji indicated, this is scam from the word go.....

John Snow ji, I am not condoning any of these acts of politicians and just placing the facts that I know. The land was waste land until it is developed. The development is happening but at the cost of ethics and many rip offs.

By the way most of the land is not government land other than the areas inside city(1980 portions). Most of it is owned by Telangana farmers ( landlords). They are not able to do anything productive on this land as it is not irrigatable. They wanted to sell anyway and when they sold it first time also they made money. In my previous post, the first sale from "near and dear" happened from the farmers. The decison to develop this land makes its value skyrocket. Then the ripoff by politician via promoters and builders start. The original landowners are also now rich people of Hyderabad.

Even assuming all ethics are followed, you still have to bring the capital to develop these areas and the owners does not have any capital and will not have an idea as well. Instead of being transperant as in Ram rajya, current timline being kaliyuga things are happening the way they are happening. Innumerable number jobs are created and city grew from 10 lacs to 70 lacs population. Wealth(white money based) was really manufactured.

Coming back to Satyam, I cannot believe that it is making losses during IT boom of India and it being 4th largest company. This Raju guy by hook or crook transferred the money to Mytas (90% owned by him and his ilk.). After transfer, he wanted to merge Maytas and Satyam and investors opposed. He fudged the accounts to show that Satyam was acually making losses. Now the ripoff is over and he goes to jail and the politicians will help him come out meanwhile governement will bail out Satyam in the interst of investors etc.

The GOI will not touch this guy beyond a point as AP LS elections are very important for Congress to be even in contention. They will bail him out. The AP police arrested him and are not not allowing SEBI or anyone to investigate him. I do not think truth will come out. I also believe GOI will use its clout and make one of the top businessmen to buy it. Also, SEBI did not delist the company and its shared are being purchased by someone big.

Vipul · Post by **Vipul** » 10 Jan 2009 23:47

Due to the class action law suit filed by shareholders in the US and surely there will be some cases in India too, it will be difficult for the actual picture not to emerge. Unless of course there is wholesale records purging by the company and the powers that be(Central Govt, Sebi, State Govt) actively aid and abet it for political expediency.

VikramS · Post by **VikramS** » 11 Jan 2009 00:56

vsudhir wrote:India hears calls for Satyam bailout (IHT)

Huh?

This 'news item' is mischief, pure and zimple.

GoI will bailout banks because depositers interests and paramount and bailout PSU MFs like UTI becoz they were sarkari to start with but won't touch stockholder losses in pvt firms with a barge-pole. Doesn't make any sense onlee.

Unkil has bailed out its badboys, so loyal yamriki press wants to paint the spread of the virus to other economies as well... WHen all are equally bad, unkil can regain moral high ground again.....

Bailout does not mean rewarding shareholders. In this context it means to keep Satyam alive as a functioning entity till the dust settles. It is not only important for Satyam employees, but for the entire Indian IT industry. The fallout of the scam can be limited as long as the foreign customers are not affected. However, if Satyam is unable to deliver on its contracts, the backlash can be much longer and hurt the other majors also. Keeping Satyam functioning is critical for the IT industry to recover from this hit. Eventually someone else will come in to buy Satyam or it will be split up and sold off to the other majors.

Rishirishi · Post by **Rishirishi** » 11 Jan 2009 02:54

VikramS wrote:
vsudhir wrote:India hears calls for Satyam bailout (IHT)

Huh?

This 'news item' is mischief, pure and zimple.

GoI will bailout banks because depositers interests and paramount and bailout PSU MFs like UTI becoz they were sarkari to start with but won't touch stockholder losses in pvt firms with a barge-pole. Doesn't make any sense onlee.

Unkil has bailed out its badboys, so loyal yamriki press wants to paint the spread of the virus to other economies as well... WHen all are equally bad, unkil can regain moral high ground again.....

Bailout does not mean rewarding shareholders. In this context it means to keep Satyam alive as a functioning entity till the dust settles. It is not only important for Satyam employees, but for the entire Indian IT industry. The fallout of the scam can be limited as long as the foreign customers are not affected. However, if Satyam is unable to deliver on its contracts, the backlash can be much longer and hurt the other majors also. Keeping Satyam functioning is critical for the IT industry to recover from this hit. Eventually someone else will come in to buy Satyam or it will be split up and sold off to the other majors.

I don't think it is such a great deal for the clients or "brand India". Firstly people have very short memory and forget fast. Secondly there has been so many scandles lately, that people hardly take note.

The vast number of opperations will probably not get hit, as others are ready to take over. Other players can simply take the client as well as the staff (if Satyam is dissolved). Most likely Satyam will be sold off to other players.

countinueing Satyams will be difficult as Investors may sue the company.

Muppalla · Post by **Muppalla** » 11 Jan 2009 03:06

Scramble to get on Satyam board
11 Jan 2009, 0222 hrs IST, Prabhakar Sinha, TNN

NEW DELHI: Satyam may be tottering but the government's decision to dissolve the the disgraced board-led by B Ramalinga Raju and replace it with its own has set off a scramble for a seat in the boardroom of the IT major.

As names of potential picks are bruited about amid discreet lobbying by interested individuals, the Andhra Pradesh government joined Life Insurance Corporation, ICICI Prudential, as well as the FII, US's Lazard Asset Management, for berths on the new board of Satyam.

There was also a not-so-subtle lobbying by individuals to join what is going to be the most talked about board of any company in a long time.

As officials in the ministries of corporate affairs, finance and law as well as those in the PMO ran checks on the names on the short list, conflict of interest consideration ruled out M Damodaran. The former SEBI chief is on the board of an IT concern, Tech Mahendra.

Former chief of NASSCOM, Kiran Karnik, also did not find favour for the same reason. The criterion is sure to work against other IT biggies whose names began floating after corporate affairs minister Prem Chand Gupta announced the scrapping of the Satyam board.

While the claims of institutions made sense in the light of the concern for their investments in the company, the flurry of interest from individuals — as distinct from those whom the government was reaching out to — was seen as pointing to the confidence that the company was not beyond salvage. It also reinforced the doubts that the profit margins of the company were not as low as claimed by Ramalinga Raju in his Mea Culpa which increasingly appears to have been designed as an alibi. RBI's move to seek the details of Satyam's accounts with different banks reflected the same suspicion.

With the government entering the frame and the room for pilferage plugged, there was a real opportunity to get associated with the widely observed turnaround story: a strong incentive.

The chief secretary of Andhra Pradesh backed up the state's claim by arguing that the future of the company will be of special concern for the state once used as the advertisement for its IT prowess. A senior official in the chief minister's office said that as the company is based in Hyderabad and a large number of investors and employees are from the state, the government needs to have a say in the management.

Life Insurance Corporation and ICICI Prudential pointed to their substantial stakes in Satyam. K T Thomas, managing director of LIC which has a 4.34% stake in the belegueared Satyam, said "We are concerned", though he refused to confirm that the company has already asked for a seat in the Satyam boardroom.

Sources confirmed that ICICI Prudential, with a 2.7% stake, also wants to be heard in the selection of the board. Foreign institutional investor, Lazard, which holds over 6% stake in the company, has written a letter to the ministry of corporate affairs that it should also be heard in the selection of the directors. Lazard International lawyer Hitesh Jain said, "We would like the government to consult us for the appointment of the member to the board." Prem Chand Gupta confirmed that he had received a representation from Lazard.

Though he refused to spell out the government's stance, sources pointed out that Lazard, being an FII, cannot be given a seat on the board.

ramana · Post by **ramana** » 11 Jan 2009 03:10

I think Raju wanted an audit of his company with his preposterous claim of being the sole defrauder. Who knows what will turn up?

putnanja · Post by **putnanja** » 11 Jan 2009 10:36

Cheat sting nettles Raju

Cheat sting nettles Raju
G.S. RADHAKRISHNA
B. Ramalinga Raju (face hidden) leaves after meeting the magistrate in Hyderabad on Saturday. (Uday Kumar Srichakra)

Hyderabad, Jan. 10: The first question stung like a bullet. “Mr Ramalinga Raju, please tell us why you cheated.”

With that sharp poser around 10.30 on Friday night, the legal investigation into India’s biggest corporate fraud began. CID interrogators squared off with the former Satyam chief who had surrendered to police an hour earlier along with brother Rama Raju.

Almost 20 hours later, around 5.30pm today, the Raju brothers were produced before a magistrate who remanded them in judicial custody till January 23. Srinivas Vadlamani, the chief financial officer of the company, was arrested tonight.

Raju will have to spend the night at Chanchalguda prison for undertrials, a far cry from his plush Jubilee Hills home and also from the air-conditioned room offered to the brothers yesterday at the DGP’s office.

For some time after their surrender and arrest, the police had been hospitable, even kind. Considering his health condition — Raju, 54, suffers from high blood pressure, acute ulcers and is diabetic — he was permitted to have a personal assistant who gave him his medicines and updated wife Nandini every hour. He had milk and bread and was given an air-conditioned room for the night.

But the niceties ended once Raju was taken to the conference room. His brother was questioned separately.

Sources in the state police said the first question was enough to rattle the Satyam founder, never mind that he was a seasoned corporate campaigner used to long verbal duels, tough posers and late nights.

“What the…” was his instant response, but he cooled off when he saw the grinning faces of his three interrogators who knew they had had their desired effect: Raju was unsettled.

The smiles soon vanished as the CID chief interrogator curtly informed Raju: “Please be seated and from now on you are here to answer and not to ask us questions, particularly no expletives or retorts.”

The second question was a repeat, but firmly asked: “Tell us why you cheated?”

As a pale-faced Raju began to explain, sources said, one of the interrogators rudely interrupted him. “For a sin of this nature, if you were in Saudi Arabia, you could have been meted out harsh physical punishment. You are lucky to be in India.”

Then began the barrage of questions from the three.

They first made him sit on a single chair for more than an hour after which he was asked to shift to another place and then after some more time, to yet another seat. Drinking water and tea were made available. Raju accepted water and a cup of black tea without sugar.

When he complained of chest pain, the police summoned government doctors, who gave him a clean bill of health, saying he was suffering from fatigue and exhaustion.

“It is normal to have these symptoms during such moments,” the doctors assured Raju and gave him a mild sedative.

After midnight the questioning stopped and he was asked to catch some sleep, but only till 6am.

The next round actually began around 7.30 this morning. Raju reportedly said he could not sleep well in the new environment and also because a foul smell bothered him.

Around 9am, they offered him and his brother breakfast and allowed them some privacy. But no calls were allowed except from his advocate Bharat Kumar, who came over to see for himself his client’s condition.

In the afternoon, after a vegetarian lunch of dal, rice, roti, curries, curd and ice cream, Raju was told that some Sebi officials wished to speak to him. His advocate was allowed to be present.

The Sebi deliberations went on till 4.30pm, when the CID said it was ready to present him before the magistrate.

Raju’s admirers

An angry herd of investors from all over the country who have been badly hit by the scandal greeted Raju as he began his legal battles.

But rubbing shoulders with them were some two dozen admirers of Raju, most of them from his Byrraju community.

“He is a one in a million leader and only he can help revive Satyam,” one of them said, and even offered to work gratis for the company if Raju was asked to lead it.

CalvinH · Post by **CalvinH** » 11 Jan 2009 11:34

Insider news is that most admirable company has an internal directive to not consider applications from Satyam employees for hiring for the time being at all levels.

negi · Post by **negi** » 11 Jan 2009 12:56

Lightening speed with which Govermund machinery was cranked to arrest Raju is noteworthy; Btw why is CID or IPS questioning Raju ? shouldn't some appropriate agency which has the competency to look into matters of such financial nature be tasked with the job ?

If there are politicians involved in this whole scam then God save Raju for Imo he would be disposed whether he names the former or not.On a personal note I hope that Raju names everyone involved in this scam at least he will add one more good deed to his name.

Vipul · Post by **Vipul** » 11 Jan 2009 19:12

http://www.dnaindia.com/report.asp?newsid=1220542

Hyderabad: The question doing the rounds is whether Satyam founder Ramalinga Raju's arrest hours before he was to depose before a Securities and Exchange Board (SEBI) team was designed to keep him in Andhra Pradesh, without letting him get into the clutches of central authorities.

Sources say the Raju brothers have such an intricate financial relationship with powerful politicians in the state that they would do their utmost to protect him, lest the skeletons tumble out of the cupboard.

It is well known the authorities have a list of Most Favoured Contractors (MFCs) for infrastructure and construction projects. These companies get priority in allotment of these projects, and it's an open secret that it takes a lot of political clout to get into the MFC list.

The fact that the Rajus' Maytas firm got almost every project for which it bid clearly indicates the level of clout it commands. "Maytas does not have all the qualifications to bag big projects, but it gets into these projects through a consortium route. Other construction companies, which do not have the political clout, ensure that Maytas is with them so that they will get the projects," a senior contractor explained.

Maytas has been given works worth Rs30,000 crore so far, including the Rs12,000-crore Hyderabad Metro Project. It is well known that every infrastructure project has a built in margin of about 14 per cent for the contractor, out of which 4 per cent goes as commission to various persons including politicians.

Sources said Raju must have lent huge sums of money to the politicians which were basically turned into bribes when major projects were allotted to Maytas. "This has sucked Raju in. He has given out money that never came back to him. It remains to be seen how much he is willing to disclose about all this now," a source who tracks such deals said.

The murky dealings in major projects became evident in the case of Gammon, which was building a flyover at Punjagutta in Hyderabad. One of the sub-contractors was said to be a relative of a powerful politician in Andhra Pradesh. The flyover collapsed during its construction and Gammon was found to be the guilty party. The authorities enquired into the matter and Gammon was asked to pay compensation to two people who were killed in the collapse. Gammon refused to pay and the political clout of the sub-contractor managed the whole affair.

It is well-known that Raju has been nurturing a political nexus right from the time of N Chandrababu Naidu's regime. This is said to have gone even further after 2004 when YS Rajasekhara Reddy came to power. So the big question is what Ramalinga Raju has left unsaid in his five-page letter about the unaccounted Satyam funds.

Muppalla · Post by **Muppalla** » 11 Jan 2009 19:19

negi wrote:Lightening speed with which Govermund machinery was cranked to arrest Raju is noteworthy; Btw why is CID or IPS questioning Raju ? shouldn't some appropriate agency which has the competency to look into matters of such financial nature be tasked with the job ?

If there are politicians involved in this whole scam then God save Raju for Imo he would be disposed whether he names the former or not.On a personal note I hope that Raju names everyone involved in this scam at least he will add one more good deed to his name.

The reason for the speed by AP police is also to delay the questiong by SEBI etc. He is well connected to both INC and TDP and hence the speed. I do not think he will be bumped off as he is living within the caste. Their numbers are substantial and as elections are very near, they will be extremely careful not to lose the entire block of votes. They will find ways to coverup.

If you read some of the articles that came out, as per the bank statements Satyam is not making losses. He might have pulled the money out to some other personal ventures which was against the investors' wishes. He might be punishing the investors for not allowing him to do what he wanted. I still do not understand why he did this way. Does he have any grand plan or he was just foolish beyond imagination.

vishnua · Post by **vishnua** » 11 Jan 2009 22:44

CalvinH wrote:Insider news is that most admirable company has an internal directive to not consider applications from Satyam employees for hiring for the time being at all levels.

This is not the right thing to do at this time. Indian Inc needs to mature little bit more. This is a false morality/prespective.

What has the people in IT has to do when the management decided to spin off the funds to implement other projects?

Sathyam was not incurring any loses.

Yogesh · Post by **Yogesh** » 12 Jan 2009 00:23

vishnua wrote:
CalvinH wrote:Insider news is that most admirable company has an internal directive to not consider applications from Satyam employees for hiring for the time being at all levels.
This is not the right thing to do at this time. Indian Inc needs to mature little bit more. This is a false morality/prespective.

What has the people in IT has to do when the management decided to spin off the funds to implement other projects?

Sathyam was not incurring any loses.

Exactly this is some thing like "kare koi bhare koi", i was little surprised by the infy assertion to not consider any of the Satyam employees.. An employee don't have any control over such top level decision making process if i am not wrong...

Yogesh · Post by **Yogesh** » 12 Jan 2009 00:30

More ever as many of the people have already pointed out about it's political angle . . . a common man can sense that this much big fraud can not be done w/o favor of the biggest mafia of the so called "democracy"... now we will see all drama... some of the babus will be chosen for sacrifice ("Bakara") and the real culprits (ohh how can they be touched they are the kings!!) will just be sit for some time to let matter calm down ... then as usual life goes on . .

rajkumar · Post by **rajkumar** » 12 Jan 2009 00:39

I all this Satyam discussion we seem to have missed this.....

Oracle India trims salaries with hour-based payments

http://www.business-standard.com/india/ ... 33/345377/

svinayak · Post by **svinayak** » 12 Jan 2009 14:12

Yogesh wrote:
vishnua wrote: This is not the right thing to do at this time. Indian Inc needs to mature little bit more. This is a false morality/prespective.

What has the people in IT has to do when the management decided to spin off the funds to implement other projects?

Sathyam was not incurring any loses.

Exactly this is some thing like "kare koi bhare koi", i was little surprised by the infy assertion to not consider any of the Satyam employees.. An employee don't have any control over such top level decision making process if i am not wrong...

Dust has to settle down.
Some practices of the Satyam management and mid level mgrs are not std based

http://www.nytimes.com/2009/01/12/busin ... ldbusiness

Over the years, the company faced competition from outsourcers growing even faster. Satyam was like “the younger brother trying to keep up with the older brothers on the playground,” said John C. McCarthy, an analyst with Forrester Research.

While the biggest firms — Tata Consultancy Services, Infosys and Wipro — revamped their business practices to become more global, Satyam “still felt like a family-run company due to its ‘command and control’ style,” said Frances Karamouzis, research vice president with Gartner in New York, which advises information technology companies. “What Mr. Raju said was what trickled down” to the rest of the company, she said.

The Indian offshoring industry went through a painful transition in 2004 and 2005, as Western giants like I.B.M. and Accenture started to cut into their business.

But Satyam was slow to transform, in part perhaps because of Mr. Raju’s management style. “He was very old school,” Ms. Karamouzis said. The company’s management, she said, was “very parochial and didn’t embrace change or implement anything differently.”

Customers had complaints. “We are tired of being required to call up the top guy in India to get things resolved,” one Satyam client told Gartner in 2005.

Perhaps to make up for market share it might be losing, Satyam started to underbid its competitors, putting pressure on its own profit margins. If the other big outsourcers were charging $27 or $28 an hour, Satyam would charge $21 or $22, Ms. Karamouzis said.

Dhanush · Post by **Dhanush** » 12 Jan 2009 15:05

It looks like there are no takers for this 'wafer thin' margins and manipulation of accounts theory. It also looks like Satyam immediately needs 120M USD for running operations for this month. There was a excellent article on DNA today.
http://epaper.dnaindia.com

Dhanush · Post by **Dhanush** » 12 Jan 2009 15:08

The propaganda machine runs on and on and on. I wonder why all these things happen just now. There is some serious agenda running behind scenes.

http://www.rediff.com/money/2009/jan/12 ... -wipro.htm

Even before the dust settled on the controversy involving Satyam's debarment, the World Bank on Monday revealed that action has been taken against a total of five entities in India, including Wipro [Get Quote] Technologies, and an individual.

The action was initiated against these entities and individual as they were found to have 'violated the fraud and corruption provisions of the Procurement Guidelines or the Consultant Guidelines,' besides offering improper benefits to World Bank staff.

Megasoft became the third Indian software vendor to have attracted the World Bank's ire, while Nestor Pharmaceuticals and Gap International were non-IT entities.

An individual Surendra Singh was barred from doing business with the World Bank for violating guidelines.

While Wipro was barred for four years beginning June 2007 for 'providing improper benefits to World Bank staff', Megasoft barred for an identical period beginning December 2007 for 'participating in a joint venture with World Bank staff while also conducting business with the World Bank.'

In a statement, the World Bank said that it decided to 'make public the names of all the companies that have been debarred from receiving direct contracts from the World Bank group under its corporate procurement programme.'

'This change was made in the interest of fairness and transparency. From now on the World Bank group would publicly list names of companies debarred from its corporate procurement,' the statement said.

Commenting on the World Bank action, Wipro said in a statement this morning: "Our inability to get future business from World Bank will not adversely affect our business and results of operations."

Megasoft officials too said that the debarment will not have no revenue implication for the company.

Earlier, Satyam [Get Quote], which was debarred on December 25 for eight years beginning September 2008, had demanded an apology for making public its name and withdrawal of what it called 'inappropriate' statement by the World Bank. The World Bank had refused to apologise.

In the list of 'ineligible' firms released by the World Bank, over a 100 companies or individuals -- some of the Indian-origin - have been barred temporarily or life.

The list includes Gurpreet Singh Malik, Vikram Deepak Gursahaney, Kamal Sharda and Sharda Impex (UK Ltd) in Nigeria, as well as Labh Singh Gill, Labh Universal, Pradeep Menon, Shivshanker P Nair and Pradeep S Nair in the United Kingdom and Mandeep S Sandhu in the United States.

All these entities are permanently barred.

In 2000, in connection with its IPO of American Depository Shares in the United States, Wipro offered a commonly utilised and SEC-approved Directed Share Program (DSP), which allowed employees and clients to purchase ADSs at the IPO price.

The programme's object was to involve employees and customers with the public offering to expand the recognition and brand. A majority of the shares sold under the DSP were allotted to Wipro employees.

Pursuant to this, Wipro representatives offered the World Bank, through its Chief Information Officer (CIO) and senior staff, participation in the program, Wipro said in statement.

All participants in the programme signed a conflict-of-interest statement, saying that their purchase did not violate any ethics or policies of their company.

However, the World Bank had determined in June 2007 the company would be ineligible for the international lender's direct contracts up to 2011, citing a conflict of interest policy.

In case of a debarred individual, the ineligibility extends to any firm which the debarred individual directly or indirectly controlled, the Bank said in its statement.

The UK and Indonesia account for a significant number of debarred entities, while a number of entities debarred are from Sweden, Nigeria and the US.

Muppalla · Post by **Muppalla** » 12 Jan 2009 18:22

vina wrote:You guys have no idea of what you are talking about. I have worked for the Tatas. Yes. They are the cleanest among the "traditional" businesses in India. But Infy and Wipro have among the stronger ethics and integrity systems comparable to the best anywhere globally. That is something they dont use as a fig leaf/nice to have wallflower kind of thing.

Lets face it. The Andhra based companies have terrible ethics. Hyderabad was known as the shady back yard for crooks trying to jump into the IT/Vity band wagon back in the early 90s itself. That aside, scratch beneath the surface of other "prominent" hyd companies in stuff like Pharma etc, you will see very similar poor ethics and integrity. The other company with piss poor integrity and ethics is the Mega Refiner. Most Dilli based "lala" companies such as the former DCM group , again. terrible scene. Go outside It/vity and outside a select few "traditional" groups, the integrity and ethics scene in traditional Indian businesses was the pits. IT/Vity and the success of rank outsiders and noobs like Infy and Wipro was what made them clean (or atleast pretend to clean and put all the corporate governance and ethics stuff, even if largely slogans) up their act. Satyam I think will sound the death knell for the "andhrapreneur" story. This is a massive set back to Andhra and the Telugu entreprenur's already poor ethics and integrity image. It will take a fundamental change in business culture, value systems and a very long time before anyone starts believing anything out of those parts. At best, those guys will get treated like the Real Estate kind of sector, full of scamsters and low level and high level crooks , a distateful deal that needs to be done , out of compulsion, if at all, but best avoided in most cases.

Vina, You have to take out Wipro now. The small news is out just today

. May be it is not as big as to be seen in a magnifying glass. This edible oil seller doing IT and ethics. Very funny.

There is a true story about Aziz saheb booking economy class because Jet Airways upgrades to Biz class becasue of the stature of the person travelling in their airline. One time Jet Airways decided not to upgrade and the next day he fumes at that Airline as the worst in India.

This behaviour is not limited to Indian companies. Examples of far worse unethical behavior from non-Indian MNCs like Accenture, IBM etc are also available. As I said earlier, it is their customers' representatives who finalizes the bid who are the real reason for their behaviour.
However, Infosys, Wipro, TCS has a tight control on these issues as compared to Satyam and most of the mid sized companies (both Bangalore and Hyd based

)

Regarding your comment about enterprenuers, I believe nothing is going to change. The person who has money will always do something. There is unbelievable lot of money with Andhra folks and they will keep doing something. Most of these big money people are from just coastal Andhra. They occupy substantial number of Engg/Medical seats in India and most of F1s to US are also these folks. Whether we like it or not Telugu people number is extremely high.

World Bank bans any business with Wipro, Megasoft12 Jan 2009, 1332 hrs IST, ET Bureau & Agencies

MUMBAI: It’s just not Wipro. From an announcement on the World Bank website, there is one more Indian company (other than Satyam and now Wipro) that has been deemed ineligible to receive contracts from the World Bank. US based IT service provider, Megasoft Consultants Ltd, which is an associate company of BSE listed Megasoft Ltd, have also been barred for four years since 2007.

The World Bank Group on Monday morning made public the names of all companies that have been debarred from receiving direct contracts from the Bank under its corporate procurement program. This change was made in the interest of fairness and transparency, it said.

Megasoft became the third Indian software vendor to have attracted the bank’s ire, while Nestor Pharmaceuticals and Gap International were non-IT entities. An individual Surendra Singh was barred from doing business with the Bank for violating guidelines.

The bank has barred three companies along with their affiliates under the Bank Group's corporate procurement program.

The ineligible firms are Wipro technologies for 4 years (2007-2011) for providing improper benefits to Bank staff{Same fraud as what Satyam did}, Megasoft Consultants Ltd. for 4 years (2007-2011) for participating in a joint venture with bank staff while also conducting business with the Bank and Satyam Computer Services, Ltd. for 8 years (2008-2016) for giving improper benefits to bank staff and failing to maintain documentation to support fees charged for its subcontractors.

This change aligns the disclosure practice for companies that provide goods and services directly to the Bank with the current policy governing procurement on Bank financed projects in developing countries.

As per reports the Bank has changed disclosure norms late 2006 which placed all the aforementioned companies under tech scanner in 2007. The bank has also said it will publicly list the names of companies debarred from its corporate procurement on a regular basis henceforth.

Nandu · Post by **Nandu** » 12 Jan 2009 20:15

I am not sure the Wipro thing can really be considered corruption, if all they did was allot IPO shares to WB CIO. That kind of thing is SOP for anybody doing an IPO.