Yes, the alarm bells are all ringing hard and continuous again for the Indian IT Sector but this time it’s not due to rupee depreciation or US economic recession or financial crisis in the world. This time it’s a fraud, India’s 4th largest IT Company Satyam Computer Services is hit by a US$1.5 billion fraud induced by company’s founder and chairman R.Raju by manipulating and inflating profits of the year with “fictitious” assets and non-existent cash.
The Satyam fraud has shocked the world as fiercely as it did to India inc. Not only it has raised the question on the image of “Brand India” in the world but also shifted the focus of the world to the Western Audit Company PwC which Satyam Computer Services hired for the Audits. Most notably in this respect, Satyam employed a Western auditor using an international accounting mechanism yet to be introduced widely in India, one that ironically was meant to give investors more transparent and accurate information of the financial state of the company. This claim now has clearly punctured all the hopes on the method and shown the hollowness as the "best practices" that advocates in the West of "free markets".
Satyam debacle has not just rocked the sentiments of the 53000 employees working around the world for the company but also the faith of foreign multinational companies in Brand India’s capability due to corrupt corporate governance.
But if the sources around the world to be believed India Inc. will be meagerly hit by the post satyam attack and would still be the hottest cake for the IT/ITES outsourcing. Yes, but the analyst’s across the world do believe that outsourcing might not get impacted despite of satyam shocker but it’s the Local Indian companies which might have to convince their customer that Satyam incident is not associated with the country’s image or all the IT companies across the nation but a matter totally related to a single company or caused by a certain individual for which whole country cannot be doubted.
It is also seen that a company’s failure is going to bring fruitful results to its rival companies like Infosys, TCS and Wipro. But two names which are really sounding to cash-in on satyam scam are ACCENTURE and IBM. The main reasons for sounding these names very bold at the moment are – Both these companies are having huge India operations so therefore, they can offer the same services to the clients at the same competitive prices and secondly, both these companies are Non-Indian, which will make the reluctant foreign customers a little more attractive to them.
Nevertheless, Satyam’s fraud of such a huge number and impact has already crowned the company with the most unwanted title of the world - - “India’s Enron”. Even though the CEO and Founder of the company is arrested and all the Satyam board of directors are being sacked, yet there is dilemma on the faith of Satyam’s future and more so with its 53000 employees who are having a feeling of cheat and even more of fear with their jobs at stake.
In a condition as worst like this and impacting so many of a service class people, it’s the need of an hour for the government to come up with a life saver plan with the help of the other major IT companies in the country and the great entrepreneurs and IT gurus should volunteer to help the government with the all kind of support for the risk free implementation of the plan for saving the 50000+ jobs of the people of Satyam family and bringing back the Indian IT System on the track. Its high time when we realize all the loop holes and corruption in our corporate sector and come up with plans and methods to make it more honest and transparent to the investors.
Hoping for a better situation soon and not wanting, to see the end of the IT dream of a company.