Satyam in deep crisis

Adding to the woes of global economic downturn and recession affecting the Indian software industry, today in a dramatic turn of events Ramalinga Raju, Chairman of Satyam Computer Services company, resigned and confessed about an accounting fraud. He has resigned after admitting that he has been responsible for inflating profits for seven years, amounting to a sum of 50.4bn rupees. According to Indian media it is the biggest corporate fraud the country has ever seen.

Being the poster boy of Indian information technology industry from many years, today’s confessions from Ramalinga Raju in a five page letter shocked the entire country. No one ever had a single clue about the fraud and today’s developments came as an utter shock to investors, employees and common public. In the letter, though Mr. Raju claims that only he is entirely responsible, it is hard to believe only a single person can falsify balance sheets. The probe will find out what exactly happened and who are involved.

I have a lot of friends working at Satyam and I spoke to few of them today. Everyone is really concerned about their jobs and about the existence of the company.

I really hope somehow Satyam comes out of this crisis, not for the sake of all those big guys at the top, but for other employees who worked like it’s their own company. If the economy was doing good and markets were at peak employees would not be worried as much as they are now. The slowdown and an almost complete stagnation in hiring are adding to the existing worries of the Satyam employees.

The repercussions of this scam on Indian corporate sector are yet to be seen. Major revenues for Indian software firms come from the outsourced projects from other countries.

Being an ex-employee of Satyam, I personally felt very sad when I heard the news on TV and felt sorry for the man, who was only few days ago a role model for many people in the country and now is being termed as the biggest fraudster in India Inc. Anyways, fraud is fraud and there are so many stakeholders who are in a disaster due this unearthed scam that was going on from many years.

Raju is quoted to have written “It was like riding a tiger, not knowing how to get off without being eaten”. But why the hell did he have to do that in the first place?

Is Satyam the only one doing fraud accounting or is it the only one that came into light?

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3 Comments

  1. Krishna
    Posted January 10, 2009 at 1:01 am | Permalink
  2. Posted January 11, 2009 at 8:39 pm | Permalink

    the pressure and high hopes on satyam from ppl made him do so.

    this crisis will link up all major companies and disturb the economic condition of india
    thank god india isn;t a free market econom like that if the U.S

  3. sri
    Posted January 24, 2009 at 4:09 am | Permalink

    How can Wipro show a 30% profit?
    when another big company TCS has 2-3% and saytam fraud was to show 3% as 20%.

    I think other gaints like Wipro & Infy should also be brought under scanner…

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