Friday, January 09, 2009

Leading Outsourcing Firm Satyam's Scam

One of the best leading outsourcing companies “Satyam” which has been serving for various banks, manufacturers, health care and media companies in the world, handling everything from computer systems to customer service puffed up its earnings and assets for many years. It has been the third of the 5000 companies back before the disclosure. After the disclosure about the company's balance sheet of the puzzle with false assets having a $1billion hovel which can not be obscured any more. Due to this, India's enormous outsourcing industry has been shaken up. This may force many large companies worldwide to investigate and perhaps give a face-lift their back offices. It is said that the contract to save the company has finally ruined and can't be uncleared any way.

Chairman Ramalinga Raju brought this into vision after resigning that he had forged accounts when the company was started from a very few employees into a back office. It has now grown to a big strength of 53,000 employees and has operation into 66 countries. According to the chairman it was a small inconsistency which didn't came into his hands and grew like an unwanted wild bush. Also he compared this to “It was like riding a tiger, not knowing how to get off without being eaten”.

Satyam till date was listed on the New York Stock Exchange since 2001. It was audited by Price Waterhouse Coopers(PWC). According to the analysts, the exposure which were matched up with Enron scandal, can lead to have impact on India's outsourcing industry. This will have a major impact on Satyam's business with its clients. Satyam clients have included General Electric, General Motors and the U.S. Government. Also in some cases Satyam is answerable for clients’ accounting. But now very soon there will be lot of Satyam's clients migrating to competitors like Infosys, TCS and Wipro, according to analysts.

All this has raised questions on the synchronized failure to notice in India and beyond.