Indian IT Industry

vina · Post by **vina** » 07 Jan 2009 18:20

Talk is that Satyam basically cheated. Used a leading bank's letterhead from what I hear via grape vine. The Finance dept there must have definitely known and actively abetted. They are responsible for serious fraud, a criminal offense. It cannot be and is definitely not a one person job/ 5 person job.. I would add that every Senior business leader with P/L responsibility would have known as well. You know your own numbers and you know your colleagues numbers as well. Now when a huge gap is there between what you know (segment wise) between what is reported, either you are complicit or incredibly blind. Cant be the latter, otherwise you wont be where you are.

JMT and 2 cents and all the rest of it. (all is this my personal opinion onree)

Tamang · Post by **Tamang** » 07 Jan 2009 19:29

For Mr.Ramalinga Raju

Singha · Post by **Singha** » 07 Jan 2009 19:39

pdf of his resignation letter is floating around today. he claims he and his family didnt profit by selling shares in the last 8 years.

yeah right - how about the false salary and perks he got sitting on top of a false impression when he should have been cast out much earlier.

Nayak · Post by **Nayak** » 07 Jan 2009 19:45

Need to see what will be the reaction from top-5 biggies. That Most Valuable Company has been ruthless in avoiding any controversy but there are bound to skeletons in the closet, the vegetable oil company nowadays seems to be beneath the radar. TCS has the governance and ethos of Tata to guide through. Stock market fell by 750 points.

abhischekcc · Post by **abhischekcc** » 07 Jan 2009 20:09

The Satyam case will have a very bad effect on Indian markets. Now every company with even a whiff of impropriety will see share price collapses.

Ginourmous Buying Opportunities Up Ahead.

Singha · Post by **Singha** » 07 Jan 2009 20:15

on the advice of a friend was trying to buy satyam today, but due to lack of
use I forgot my demat account password and couldnt login during trading
hours.

but all is not lost. the FIIs might engineer a controlled implosion now and
make their entry, I doubt all holdings sold today...retail investors panicked ofcourse and dumped everything.

people (PE types, rival cos) looking to buy the co would be looking to beat
its share price down to 15/- to make it really cheap for a cash flow +ve
co that is producing real work for real clients...it isnt some social networking startup with eyeballs only.

Raju · Post by **Raju** » 07 Jan 2009 20:19

Vipul wrote:Anil Ambani a White Knight for Raju?

...

I have to disagree with this at many levels.

Tanaji · Post by **Tanaji** » 07 Jan 2009 20:40

Ramalinga Raju is a novice looks like. He should have:

Admitted to nothing and made the directors fire him
Claim his golden parachute
Hold a press conference and claim that this is a conspiracy by pick any of the following:
- Other IT competitors
- Jealous directors
- Conspiracy against the caste that he belongs to
- Al Qaeda and LeT (to play the patriotism card)
- The World Bank
Then join a political party and claim victimisation. Congress/BSP is the best, with BJP a close second

That way, his future would have been assured.

Singha · Post by **Singha** » 07 Jan 2009 20:42

Beleaguered Satyam forms crack team for fire-fighting

IANS

TimePublished on Wed, Jan 07, 2009 at 19:25 in Business section

New Delhi: Battered IT bellwether Satyam Computer Services Ltd on Wednesday formed a crack team to run the day-to-day operations of the beleaguered company following the dramatic resignation of its founder-chairman and managing director from the board.

In a letter to Satyam’s 53,000 employees, interim CEO and whole-time director Ram Mynampati said a ‘SWAT’ team consisting of senior leaders has been formed to steer the company through the current challenging phase.

“The SWAT team represents all customer facing units, key horizontal competency units and critical support units. The team, consisting of many Satyam veterans of 10-20 years' experience in the company, has committed to work together to make it happen. They have the final call on most customer related matters,” Mynampti said.

A Satyam spokesperson told IANS that the acronym SWAT was used by the interim CEO to convey that a crack team similar to the elite tactical unit in American police departments has been formed for fire-fighting operations in the company.

Briefing the staff about the critical changes at the board and leadership levels in the light of two promoter directors resigning, the interim CEO said the current quarter (January-March) would be a tumultuous one, as rumours would abound and competition would try and leverage it to their advantage.

“As a proactive measure, we have formed empowered cross-functional teams, headed by leaders in the respective areas, to address pan-organisational issues like delivery excellence, customer and associate retention, pipeline management, cost controls, collections,” Mynampati said.
(vintage mbaspeak)

He said the SWAT team would meet customers in person over the next two weeks as well as onsite employees to explain what happened and the actions being taken to retain their confidence in the company.

The developments led to the resignation of four independent directors last month after the company’s aborted bid Dec 16 to acquire Maytas Properties and Maytas Infra, the two realty firms run by Raju’s two sons, for $1.6 billion (Rs.79.2 billion/Rs.7,920 crore).

“What we are confronted with is the challenge of continuing our business operations, seamlessly. We will need your involvement and ideas to make it happen. This might involve even more effort at every level, in the near term. This is the time to prove to the world that we are united and will succeed in overcoming the challenges,” the letter said.

“I am confident that I can count on your continued support as I commit to our customers that we will ensure deliverables and commitments are serviced,” Mynampati said.

Referring to customer assets, service offerings, delivery processes and scalable support systems built by the company over the last 21 years, he said Satyam was acknowledged for its leadership bandwidth and had demonstrated reputation for collaborative functioning.

“This is the time when we have to apply it in real life. What we have been trained for, we will now put to work. Let us continue to handle our respective areas with total autonomy, freedom and control,” he averred.

Ironically, on a day when the two promoter executive directors resigned and the company’s stock was battered on the bourses, Mynapati recalled that the company was acknowledged as being amongst the top three best employers in India by Hewitt and Mercer in 2007.

The American Society of Training and Development (ASTD) has also named Satyam as the best globally for its learning practices, the first IT firm outside the US.

Singha · Post by **Singha** » 07 Jan 2009 20:49

arf arf

SuKan · Post by **SuKan** » 07 Jan 2009 21:06

North Eastern Hill University gets `Param Sheersh' supercomputer

The `Param Sheersh' computer system is developed by C-DAC and is funded by the department of information technology of the ministry of communications and information technology, a government press release said.

This high performance computing facility aims at conducting research in strategic areas of weather, seismic, bio-informatics, physics, computational fluid dynamics, material sciences and life sciences.

The facility shall also serve as a core backbone platform for the students, researchers and faculty members of the region to develop competing skills for solving challenging problems requiring massive computational work, especially in the areas of physics, chemistry, mathematics, bio-informatics, botany, zoology and environmental science.

''Open source HPC applications like WRF, MM5, MOM4, ROMS, COSMOS under climatology, Quantum espresso, Abhinit under physics domain, mpiBLAST, ClustalW under bio-informatics shall be ported on the systems for conducting research,'' the release said.

http://www.domainb.com/infotech/itnews/ ... puter.html

Vipul · Post by **Vipul** » 07 Jan 2009 21:40

Hindsight Vision being 20-20,one common sense query should have been how come a price warrior like Satyam(Aggressive quotation often 50% of its competitors) always managed to announce net profit and margins at the level of its peers?

I am sure a lot of scandals can be uncovered if a proper investigation is done on the "SEZ plans" of the other IT majors.

Vipul · Post by **Vipul** » 07 Jan 2009 21:45

Raju wrote:
Vipul wrote:Anil Ambani a White Knight for Raju?

...
I have to disagree with this at many levels.

One solid reason AA would have agreed to bail out Raju would have been due to the Metro lisence that he held and ofcourse AA would have also got a lien on all the Land holdings
This is ofcourse before the confession that Raju has made.

archan · Post by **archan** » 07 Jan 2009 21:58

Singha ji, wrong forum. You meant to post it in the nukkad perhaps. Please do the honors.

Raju · Post by **Raju** » 07 Jan 2009 22:04

Vipul wrote:
Raju wrote: I have to disagree with this at many levels.
One solid reason AA would have agreed to bail out Raju would have been due to the Metro lisence that he held and ofcourse AA would have also got a lien on all the Land holdings
This is ofcourse before the confession that Raju has made.

Anil Ambani can never be a white knight for Raju.
Infact Raju has opposed Anil Ambani and likes for as long as he can remember.

Nayak · Post by **Nayak** » 07 Jan 2009 22:17

Singha wrote:Beleaguered Satyam forms crack team for fire-fighting

IANS

TimePublished on Wed, Jan 07, 2009 at 19:25 in Business section

“As a proactive measure, we have formed empowered cross-functional teams, headed by leaders in the respective areas, to address pan-organisational issues like delivery excellence, customer and associate retention, pipeline management, cost controls, collections,” Mynampati said.
(vintage mbaspeak)

“This is the time when we have to apply it in real life. What we have been trained for, we will now put to work. Let us continue to handle our respective areas with total autonomy, freedom and control,” he averred.

Looks like time for the yindoos to lift their dhotis, tuck them inside the undies and flee the battlefield.

Satya_anveshi · Post by **Satya_anveshi** » 07 Jan 2009 22:25

IMO Satyam scandal is India's made-off (maydoff) scandal.

Tanaji · Post by **Tanaji** » 07 Jan 2009 22:34

Raju wrote:
Anil Ambani can never be a white knight for Raju.
Infact Raju has opposed Anil Ambani and likes for as long as he can remember.

Are you the same as or in any way related to Ramalinga Raju? Also, what do you think that this might be the work of Islamic Gladios that you keep speaking about?

John Snow · Post by **John Snow** » 07 Jan 2009 23:34

Madoff India....

Meraa Naam Raajuu Gharaanaa Anaam
Bahatii Hai MUSI Jahaa.N Meraa Dhaam
Meraa Naam Raajuu ...

Kaam Naye Nit Giit Banaanaa {//

}
Giit Banaa Ke Jahaa.N Ko Sunaanaa
Koii Na Mile To Akele Me.N Gaanaa
Kaviraaj Kahe, Na Ye Taaj Rahe
Na Ye Raaj Rahe, Na Ye Raaj_Gharaanaa
Priit Aur Priit Kaa Giit Rahe
Kabhii Luut Sakaa Na Koii Ye Khazaanaa

Meraa Naam Raajuu ...

satya · Post by **satya** » 08 Jan 2009 00:33

Hyderabad is India's largest export center for another infamous commodity or we say transaction capital and Raju was a medium level player in tht market till IT craze came in and Raju saw a simple opportunity in continuing his old business under IT cover except now many medium size & a few large fishes in the net . Raju is safe , he was another service provider in Hyderabad nothing more . Well wait for its political ramifications and a certain third front /past kingmaker having one of the many sleepless nights to come . So enjoy mathi with chai , its winter fun for dilli billis

Vipul · Post by **Vipul** » 08 Jan 2009 01:07

What really gets me is instead of using the recently aquired power(through Govt notifications & special law in parliament) and filing charge-sheet for arrest of Raju, SEBI made this asinine statement :
Satyam is "not the first scandal to come out of Corporate India and nor is it going to be the last".

Seems Mr Bhave has taken a cue form Mumble Mumle Singh and Designer Patil in abdicating responsibility at the first inkling of trouble and throwing up hands in the air.

ramana · Post by **ramana** » 08 Jan 2009 01:53

Satya_anveshi wrote:IMO Satyam scandal is India's made-off (maydoff) scandal.

Driving to wokr I thought the same. However looks like many ITVITy folks did get jobs in this shell company. Also it was the opposit of the company name Satyam- truth.

There is a Hyd term for this- batti bazu.

Never knew it rhymed with raju. I think the scandal unravelled with Nagarujna Finance which led to arrests.

Satya_anveshi · Post by **Satya_anveshi** » 08 Jan 2009 02:53

satya wrote:Hyderabad is India's largest export center for another infamous commodity or we say transaction capital and Raju was a medium level player in tht market till IT craze came in and Raju saw a simple opportunity in continuing his old business under IT cover except now many medium size & a few large fishes in the net . Raju is safe , he was another service provider in Hyderabad nothing more . Well wait for its political ramifications and a certain third front /past kingmaker having one of the many sleepless nights to come . So enjoy mathi with chai , its winter fun for dilli billis

Can you she some more light on this? I am completely unaware of this.

I know of an Hyderabad company that can be truly called the "first" IT company called Frontier Information Technologies. This company focussed more on internal market and developed products for hospical management, hotel management and library management. The CEO of the said company was on Berkeley grad and believer of desi fundamentals and didn't believe in "body shopping'.

Satyam was a small player with 4 or so computers at one time in their office but relied more on body shopping as business model. I have seen a general business acumen of the folks over there including some companies who are sub-contractors for defense companies. I don't have good things to say about them.

The other shady thing I can think of, done in Hyd is probably selling organs of peasants. I don't think it is a particular preserve of Hyd than is done in North. Pl. educate.

paramu · Post by **paramu** » 08 Jan 2009 03:29

^
Child brides?

Satya_anveshi · Post by **Satya_anveshi** » 08 Jan 2009 04:00

paramu wrote:^
Child brides?

I don't believe what satya said is right. I am waiting for his response.

Rishirishi · Post by **Rishirishi** » 08 Jan 2009 04:32

While everyone is throwing dirt on this Satyam founder (rightly so), let us not forget that he made the dreams of tens of thousands come true, he contributed to export growth and created a "globally competative company".

Sad day for India and indian Business. He should be made responsible for his actions and face criminal charges of fraud. If found guilty, he should be sent to jail.

Satya_anveshi · Post by **Satya_anveshi** » 08 Jan 2009 05:21

I haven't reviewed Satyam's annual report or for that matter any of the Indian companies annual reports, but what is so complicated about Satyam's business model.

Generally, Indian oursourcing companies have standard contracts that stipulate certain billing for the resources provided and at times fixed contracts. They may have variations of these based on whether the management is provided by teh client or the indian company. Billing rates and payment terms too are rather standard and companies generally have decent cash-flows. Amusing! If Raju is going, I am sure all those directors are all toast.

ramana · Post by **ramana** » 08 Jan 2009 05:37

Who was the accountant and why is no one talking about it? Also Satyam had ADRs issued in New york and were supposed to be having intl accounting standards? So where was the gap?

Fraud is a big thing and he should be charged yet the SEBI is dumbstruck as to what it should do! I think its called dafa 420 of IPC.

Is he admitting to this to prevent a greater lapse from coming out? Was the collapse due to demands for money by politicians to finance coming elections?

Where is CBN in all this? The rumor was he had a big kickback as cost of doing business in Hyd.

A lot of unanswered things here.

hnair · Post by **hnair** » 08 Jan 2009 06:00

This looks like our Tibet protests@Olympic time of China and Recruit Cosmo scandals of Japan. The Indian tissue culture with a pompous western provided label saying "Future Super power" must have grown out of control. We will see more firms hitting the penicillin barriers and more screaming western press headlines of "Bad Indian corporate practices". Forget the fact that a lot of these companies operate on western practices. This will impact perceptions of Indian businessmen, who too are only as good or bad as others in the world.

Like wallstreet, we need heavy duty shills in the press and ideally should have owned the press. Else a lot of Indian mango investors are going to be burnt.

Gerard · Post by **Gerard** » 08 Jan 2009 06:08

Satyam: A Rs 7,000 Cr Lie

Satya_anveshi · Post by **Satya_anveshi** » 08 Jan 2009 06:17

His resignation letter is here: http://im.rediff.com/money/2009/jan/07s ... -wrote.pdf

The letter is candid and he is following yahoodi ploy of making himself a "victim." Surely based on the timing and potential repurcussions and *instant* reaction from Narayan Murthy, GOI (well..optimism is a bitch) should look at whether Raju was under any coersion to bust the bubble at this time.

Narayan Murthy's comments are akin to chor ke daadi me tinka, who the hell knows.

negi · Post by **negi** » 08 Jan 2009 07:26

This Satyam fraud is not just the handy work of Mr Raju only. The whole bunch of directors and third party auditors should be booked .And what was contingent from PWC smoking when all this was happening under their nose ?

vsudhir · Post by **vsudhir** » 08 Jan 2009 07:31

The artha-satyam scandal will haunt desi IT for a while at least.

In isolation, its no big deal. But moi concern now is what if its just the tip of the iceberg? What if there're more where this came from?

Singha · Post by **Singha** » 08 Jan 2009 08:13

PWC might get blacklisted in India. my wife's co also uses them and as per MD they are quite casual but charge a lot. DSP-ML brought in for advice after maytas
blew up terminated their contract yesterday morning after finding accounting fraud
*in just 10 days of due diligence on the book*. this was what made Raju realize
that exposure was imminent.

apparently he was a buddy of CBN and invested all his wealth in land, then
Reddy became CM but he paid a "hefty cash penalty" per TOI to get in his good
books and carried in accumulating land. Sreedharan(DMRC) the consultant to
maytas in Hyd metro withdrew saying there was a underhanded deal going on to extend the metro route and Raju was sewing up land on that corridor.

retail investors will be lucky to get anything out of this. the stock looks headed
to 0.0

for employees if they can retain clients it will survive in some form, but huge
reduction is sure down the line. if cash flow cannot be kept good the co will
go under.

arthur andersen had 113,000 people pre-enron. now it has 200 - mostly janitors and lawyers.

hnair · Post by **hnair** » 08 Jan 2009 08:18

singha, I remember some BRF members dissing Shree Sreedharan at that time, saying he knows nothing about finance. But I guess it is easy to spot financial sinkholes for a tunneler like him

vsudhir, any scandal in the modern finance world is a quarrel between thieves. So of course there will be tons of scandals that can be picked up from the huge basket of scandals that is the modern day business/trade world. Depends on what is the purpose of the handlers. What interests me is the timing of this scandal.

disclaimer: I have never had anything to do with any Satyam companies and do not care about its business fortunes. So here goes my take:

For all those who are asking for Satyam honchos to be punished, to me they are just another harbhajan singh or sreeshanth. Crass behavior? yes. But then, like Harbhajan, the Satyam honchos are OUR men and they dared to play the game of THEIR'S. We should not fall into the trap of "gentleman's game, therefore we should punish our guilty" tripe that was fed to us in cricket. What we will see is a massive DDM suckfest to western "financial experts" in the form of "Public trial and hanging of Satyam". The same experts who supported the likes of Madoff. We do not have a lot of international brands to play around with, unlike these "financial experts". So we should be careful in not going overboard with this. Act Paki and claim that he is under "house arrest", but no "western questioning". Infact RRaju is shrewd when he says he is "ready to submit to the laws of this land".

A case in point is the demise of hawala. We killed a homegrown money transfer mechanism, the hawala, because west used the bogey of terrorism to shove down our throats, the likes of Western Union. I am not going into their links to US intel or how we lost our own extensive intel inside hawala channels and became dependent on western intel for terror funding nowadays. The ground work for this final destruction was laid by the '90s Hawala scandal, in which we ourselves diligently trashed hawala routes and raked politicians of ALL parties across coals, instead of introducing legislation/regulations, modernize routing/promissory devices and laws for hawala sector. By now we would have had a solid grip like what US and UK have on at least a major chunk of the money flow inside Asia. Instead hawala was tarnished and buried by us, because it was considered "illegal by modern banking" standards. A standard set by west, which they themselves followed at their convenience, as we saw recently.

Heck, we are not putting a bounty on the chap sitting behind ISI's India ops desk. So why persecute a man who actually milked the global scale looters of NYSE/NASDAQ? Because he "did not deliver profits for the wallstreet investors"?

I am a pessimist when it comes to lingering empires and its devices of world domination

Muppalla · Post by **Muppalla** » 08 Jan 2009 08:29

It should not be a big deal. If Ramalinga Raju is out and before its client base recedes it is still a good buy for those who are in IT consulting. This company has employees everywhere in the world. If no one comes forward then the real problem starts. There are a lot of nice campuses that are owned by Satyam. This company is now HYD based company but in earlier days of IT it was headquartered at Chennai. There was (is?) a company called Megasoft that used to send scores of people during Y2K times.Megasoft and Satyam were same and later merged. Later this turned into massive IT sourcing company.

I did not understand public confession as this is not a desi trait and cannot be an Andhraite trait

This confession is biggest surprise of the new year for me.

This is one IT company that was built using caste favoritism. Ramalinga Raju's father used to send his recommendations to recruiting teams of Satyam for anyone from his district and there used to be no interview for his recommendations. For those who are not from AP, Rajus/Vermas are not last names but just clan names that the very small Rajput equivalant community in AP keeps as part their names. These are mostly situated in West Godavari and North Andhra districts and relatively rich community. The headlords of this community invested a lot in education in the form of massive colleges with modern facilities in those areas. Satyam is pride of this community. The rumor (I believe it as truth) was that you complete BE(Computers) or MCA and if you are a Raju then you are gauranteed a job in Satyam. It really happened that way for a very long time. However, after Ramalinga Raju took over, he made it professional and brought in many changes and this company really grew with competetive spirit. They still possess a very big GE account. It also has a good Data warehousing practice and lot a client base.

In one of the deals, they out bid TCS at GE lighting in a way that everyone got shocked. TCS offered one consultant free for every two consultant on-site in case GE-Lighting offshores. Satyam got the deal because they offered 9 consultant free. There are places satyam placed its consultants as low as 20 dollars per hour. It is obvious that there will be a lot of pressure on the margins especially during down time.

Hope that Ramalinga Raju falls but not the firm. Let the owners and name change as in the case of Anderson consuting(Accenture) and KPMG consulting (splitting to BearingPoint).

This happens/happened everywhere in the capitalist world but if it happens in India, all the companies are seen with a -ve eye. This got to change and I do not know how and when this will change.

Muppalla · Post by **Muppalla** » 08 Jan 2009 08:36

hnair - That was an excellent post. I could not convince a desi co-worker at my workplace. The way substantial number of desis propagate here(in US) is that all desis are corrupt and this is on the same lines. They do not even allow the argument to compare to Enron and the securities scandal.

The corruption in IT consulting industry in US is far deeper than a lot think and Indian companies are both part and victim of this system. I cannot further eloborate on this line on the forum.

ramana · Post by **ramana** » 08 Jan 2009 08:37

I talked to someone who knows RR. He says the chap took on all the guilt and tried to do his best to save the company. He is no crook at the bottom line.

I think there is or was some political pressure at the back of all this. I dont know if its external or internal.

I agree with hnair we should not trounce our own guys. Who knows if Donald Trump can come back RR can too.

Singha · Post by **Singha** » 08 Jan 2009 09:22

Nortel is one co that has been through a similar process in last few years but
being a product co with a wide installed base it is easier for them to survive than
a service co who only do projects and hand over all the ownership. in service industry the 'reputation' matters a lot esp when Most Valuable Co and others are also in the run.

Most Valuable Co dashed its chief mentor to campus last night giving tv interviews
and Pai sahib was also prominent on the airwaves. damage control in full swing to make sure the hull breach is contained to sector11

Satya_anveshi · Post by **Satya_anveshi** » 08 Jan 2009 10:00

ramana wrote:I talked to someone who knows RR. He says the chap took on all the guilt and tried to do his best to save the company. He is no crook at the bottom line.
I think there is or was some political pressure at the back of all this. I dont know if its external or internal.
I agree with hnair we should not trounce our own guys. Who knows if Donald Trump can come back RR can too.

US took a credibility hit in what everyone thought is their forte (financial industry). India is returning the favor in its area of expertise (IT industry) and has no reason to do this voluntarily.

I guess the same thing is happening to Pakistan...it is being asked to pack up terrorism (its forte)