Satyam's latest updates - May Axe 10,000 Employees: Headhunters

[sajiv]

Satyam impact on Vizag IT industry likely

Prabhakkar Sharma

Government initiative hailed

VISAKHAPATNAM: The Satyam episode is likely to have its impact on the IT industry in the city which is at the takeoff stage having started just a couple of years ago so much so it sincerely wants Satyam to be back on its legs for their own progress.

Talking to The Hindu here on Sunday, president of Vizag Information Technology Association and Head, Business Solution Group of Sankhya Technologies, Murali Manohar Rao Bulusu, noted that the credibility of the IT industry was likely to be affected with Satyam experience. "But I feel it is a short-term phenomenon. One likely problem the smaller IT companies face is a longer checklist as the credibility is somewhat affected. But, the industry is mature enough and perhaps these kinds of crises are needed for it to emerge stronger," he opined.

It would greatly help if the Satyam company is prevented from falling, he felt, and appreciated the government for taking the right stand towards this. "The quality of work in Satyam was never in doubt. The client list of Satyam is like who is who due to quality," he pointed out.

Quality work
On its part, the VITA would not fish in troubled waters. "We will not take this as an opportunity to cripple the employees. We will not poach employees from Satyam but extend full support to them in whatever way possible – by expressing our solidarity with them and help them though we are not in agreement with what the Satyam management has done," Mr. Bulusu said. He reiterated that quality work would always stand one in good stead.

The Satyam Center in the city has a few hundred employees and is one of the four major companies which have set up their branches here. On the other hand, there are quite a few smaller IT companies in Visakhapatnam which has been rated as a tier two IT city. Director and Executive Vice-president of Xinthe Technologies Sastry Pullela stated that all along, they had been promoting Vizag as an attractive IT destination citing the example of Satyam Computers.

[sajiv]

Emerging IT hub in Vizag may take a beating

Industry wants Satyam to be on its feet soon

VITA expresses solidarity with Satyam staff

Government intervention hailed

VISAKHAPATNAM: The Satyam episode is likely to have an impact on the IT industry in the city, which is at the takeoff stage, having started just a couple of years back so much so it sincerely wants Satyam to be back on its legs for their own progress.

Talking to The Hindu here on Sunday, president of the Vizag Information Technology Association and Head-Business Solution Group of Sankhya Technologies Murali Manohar Rao Bulusu noted that the credibility of the IT industry was likely to be affected with the Satyam experience.

Short-term effect
"But I feel it is a short-term phenomenon. One likely problem smaller IT companies face is a longer checklist as the credibility is somewhat affected. But, the industry is mature enough and perhaps these kinds of crises are needed for it to emerge stronger," he opined.

It would be of great help if Satyam was prevented from falling, he felt, and appreciated the government for taking the right stand. "The quality of work in Satyam is never in doubt. The client list of Satyam vouches for it, " he pointed out.

On its part, the VITA would not fish in troubled waters. "We will not take this as an opportunity to cripple the employees. We will not poach employees from Satyam but extend full support to them in whatever way possible – by expressing our solidarity with them and help them though we are not in agreement with what the Satyam management has done," Mr. Bulusu said. He reiterated that quality work would always stand one in good stead. The Satyam Centre in the city has a few hundred employees and is one of the four major companies which have set up their branches here. On the other hand, there are quite a few smaller IT companies in Visakhapatnam, which has been rated as tier-two IT city.

Director and Executive Vice-president of Xinthe Technologies Sastry Pullela stated that all along they had been promoting Vizag as an attractive IT destination citing the example of Satyam Computers. "Now that the company has suffered a heavy blow, the ripple effect will also be felt by the smaller companies here. There will be more due diligence on the part of customers and, in spite of the advantage of low costs, it may become difficult to get new contracts and even for the existing projects it is not going to be easy.

"What happened at Satyam Computers is most tragic and all will be hit – the employees, investors and the industry as well. We hope things will be set right by the intervention of the government. The appointment of Kiran Karnik as one of the directors on the Satyam board is a welcome move," he said. Mr. Pullela also wanted the government to take all necessary measures to bring the culprits to book and restore confidence in the system.

Auditors decried
"But, at the same time, we want Satyam Computers to get back on the track keeping in view the welfare of more than 50,000 employees and investors, and also for the welfare of the industry in general. We express our solidarity with the employees. " Both Mr. Bulusu and Mr. Pullela criticised the auditor Pricewaterhouse Cooper for its role in the scam.

[Kalyan]

Tech biggies may bag $4 bn outsourcing deals this year

Tech biggies such as TCS, Infosys, Wipro and HCL are all set to get new outsourcing contracts worth $4 billion from top customers
including British Telecom, Citi, GE and Bank of America this year. In a bid to cope with their tightened budgets, these companies plan to send their information technology works to offshore locations such as India.

Among some of the top deals coming to India, $250-million outsourcing contract being considered by Australian phone firm Telstra is expected to be finalised by the end of January, followed by several contracts worth between $50 and $100 million from Citi, BT, GE and other customers.

Outsourcing expert Sabyasachi S Sathyaparasad of Mindplex Consulting said that the new deals will include long-term application maintenance contracts. However, even as these customers seek to award new projects by renewing existing contracts, Indian vendors may lose over $300 million because of lower billing rates.

"Many large customers have reduced their IT budgets by up to 10%, and they plan to seek more cost and business output-based deliverables from service providers in these difficult times," he said.

Telstra plans to reduce the number of vendors it works with in order to have one supplier for each domain across the product lines for bringing down the cost of managing IT systems. "The company wants to move more than half of this contract to an offshore location such as India, and that is why pure Indian offshore vendors including Infosys, Satyam and EDS-Mphasis are being seriously considered," said a senior executive at one of the top tech firms bidding for the Telstra contract. He requested anonymity.

Reducing the number of IT vendors from four to two is part of Telstra's overall transformation strategy. The company plans to bring down the number of IT systems from around 1,350 to almost 300 by 2010. On the procurement side, Telstra has already reduced the number of suppliers by almost 20%, translating into saving of $226 million this year. At a time when companies are seeking ways to cut costs, Best Buy, Visa and Nisaan are aiming at achieving significant savings through renegotiation and renewal of contracts.

Last year, when BT renegotiated its contract with Xansa, the company aimed to save around $123 million over next six years. However, BT's restructured deal also witnessed more work for Xansa, estimated to be almost 80% of BT's overall back-office projects.

Customers such as Citibank are also seeking to send more IT projects to India. "As we face these (economic) challenges, there will be greater demand for moving more work to offshore locations," Jagdish Rao, global technology head for Citi, said during his visit to India last month.

Mr Rao was in India to announce a six-year and over $500 million master services agreement with Wipro for delivery of infrastructure services and application development. As part of the deal, Wipro acquired Citi Technology Services for around $127 million, which came with Citigroup's commitment to outsource all future infrastructure management contracts to the company.

Meanwhile, companies such as Tesco, the world's third biggest retailer, are already seeing their offshore outsourcing initiatives fetching rich dividends. Mike McNamara, director operations and information technology at Tesco, told ET last week that his company would continue to outsource more work to India at its captive centre and to top Indian software vendors such as TCS and Infosys.

Tesco saves around $60 million every year by outsourcing works to India, which was a compelling enough reason to funnel more work to the country, he said.

courtesy : economic times

[Kalyan]

Satyam board's top task: New team, meeting working capital

The task ahead for the new Satyam board is well cut out. In its first meeting in Hyderabad on Monday, the board will elect its
Deepak Parekh chairman, find out a solution for creation of working capital and appoint new management of the company. The government on Sunday constituted a three-member board for Satyam. The members are HDFC chairman Deepak Parekh, former Nasscom president Kiran Karnik and former chief of Securities Appallate Tribunal C Achuthan.

The new board will meet with a mandate to '' take necessary immediate action to put the company back on the road,'' taking it out of the present crisis, which started after its chairman B Ramalinga Raju revealed fudging of its accounts last week.

In its first meeting, the board is likely to elect Deepak Parekh as its chairman. It is learnt that the government has already sounded the members about Parekh as chairman. The other members will be appointed by the government with the consultation of the chairman and other appointed board members.

"I am going to Hyderabad for the board meeting tomorrow,'' Parekh said. The first task of the board is to restore confidence in the clients and investors to continue business with Satyam, he said, refusing to answer any further question.

At present, Satyam has no cash reserves , despite the fact that the balance sheet prepared on March 31, 2008, shows a cash reserve of Rs 5,700 crore. To ensure smooth functioning of the company, a senior official said the company would require a new management, which could be trusted by clients and lenders, who have stopped giving Satyam money after the revealation of accounting fraud.

According to sources, interim CEO Ram Mynampati may be sacked. Government has criticized his role as a director , in its application to the Company Law Board (CLB), where it had sought permission to sack the earlier board.

While it's unlikely that the new board will continue with Mynampati as CEO, also, it will have to ensure that the new CEO must be aware of the functioning of the Satyam, having over 500 clients. Parekh will also discuss availability of working capital for the company as it is facing acute financial crunch. It immediately needs credit from banks to continue operation. Banks are not ready to lend the company against receivables as collateral, saying it is very difficult to believe on the company's statement as its balance sheet is under cloud.

courtesy : economic times

[Kalyan]

Hiring bleak? Here are jobs for Satyam employees

Minutes after Ramalinga Raju's resignation hit the headlines, employees of Satyam began looking to exit the company like mice on a
Hiring Vinay A (name changed) counted himself lucky that his cousin at an IT company in Kenya let him in on an opening. "However, a lot of my colleagues are really worried. Clients are pulling out of projects and were expecting aggressive downsizing by next month," he says.

So people are looking for opportunities right away, but with the current slowdown, the hiring scenario looks bleak.

However, there are companies that are hiring in the current scenario and depending on the job profile, one could land a job at companies like Tesco HSC.

The company is looking to add around 1,200 people to its existing workforce of 3,000 plus.

"We would certainly be open to hiring anyone from Satyam. The company is known to have some very high quality talent and we would certainly respect that," says Sandeep Dhar, CEO of Tesco HSC. "We have seen a sharp increase in the number of resumes in the past few days from people from various companies, including Satyam."

Headhunters say that IT companies like Microsoft, IBM and Oracle are hiring, though this is primarily only in niche areas. Financial houses like J P Morgan and Fidelity and BPOs like FirstSource are hiring too.

"Insurance firms like HDFC Standard Life, Max New York Life and ING Vysya Life are looking for sales managers," says a top executive in an HR company.

"We are looking to increase workforce from 160 plus to 250 in next 12-15 months and we have noticed a spurt in resumes from Satyam employees," says Vani Sathvik, VP (HR) of Eka Software. "We would not discriminate against Satyam employees while hiring as the capability of an individual is unrelated to the deeds of the company's ex-chairman."

courtesy : economic times

[sajiv]

Satyam fiasco affects techies in city

KOCHI: The shock waves generated by the Satyam fiasco have dashed the hopes of hundreds of B.Tech students in the city who have got placement offers from the Hyderabad-based company.

A preliminary estimate revealed that at least 300 youngsters from premier colleges and second-rung institutions in the city have been awaiting the final call from the company. They were part of the 6,500 fresh recruits across the country who received offer letters during campus recruitments from Satyam in 2008.

Cochin University of Science and Technology alone has nearly 60 students (July, 2008 pass-out) waiting to hear from the HR department on their joining dates.

Model Engineering College (MEC) at Thrikkakara was not behind, with almost the same number (around 60, June 2009 pass-out) expecting the call from the company headquarters in Hyderabad. An exact number of the hopefuls could not be ascertained, as the company had also given offer letters to candidates based on a test conducted by a private recruitment agency.

Confirming that many of his friends, who received placement offers from Satyam, had failed to receive proper intimation on the joining dates, N. Sadashiv of MEC said that the company authorities had asked the students to update their profiles but they could not give any assurance on the possible date of joining.

The news that broke on Thursday that Satyam may lay off over 10,000 employees next month has virtually sealed the dreams of the young techies. Mathew Koshy (name changed), a B.Tech mechanical student, who had received the job offer from Satyam, said that the company was left with no cash to pay the salaries, according to reports in the media.

Remya Nair (name changed), another student who got an entry-level offer at Satyam, said that she also came across reports that about 20,000 employees of Satyam had posted their resumes on job sites.

"How can we expect a call when the existing employees themselves are trying to get out of the company?" she asked.

Sidhharth V., a B.Tech computer science student, who had been waiting for the joining letter for the past six months, said that the company authorities had given them false hopes by saying that they would honour each and every offer letter issued.

Shankar Vasudev, a student of electrical and electronics branch, said that the meltdown has actually trimmed the number of campus placement offers. "Satyam was my only option. I had turned down offers from companies based in Kerala before accepting Satyam's offer ," he said.

Admitting that the campus recruitment scene in the State was worse, George Mathew, faculty-in-charge, Training and Placement Cell at the School of Engineering under the Cochin University of Science and Technology, said that companies had stretched the joining date by six to eight months for students who had passed out in July.

"Earlier, some of the companies had told students that they could join by the end of December. But going by the current situation, I do not think when these companies could take in the students," he said.

[dwarakesh]

Satyam's new board meets, Parekh the likely chairman

Satyam's three-member board constituted by the government yesterday met informally for the first time in Hyderabad yesterday. They discuss ways to get the IT company back on track.

Eminent banker Deepak Parekh, IT expert Kiran Karnik and former SEBI member C Achuthan arrived at the Infocity campus of Satyam for the meeting, in which the chairman of the board is expected to be elected.

The board members are likely to meet the press in the evening.

Earlier, the announcement was made by corporate affairs minister Premchand Gupta. Announcing the appointments he said, "The board is expected to be convened immediately to decide the further course of action".

The government is likely to appoint seven more members to the board. The chairman of the board will be decided by the new board. The board meeting was originally scheduled to meet on January 10. The  government disbanded the board on January 9.

Gupta said that the board's first priority would be to restore the company's credibility, customer confidence and employees' morale, apart from safeguarding the interests of investors and other stakeholders.

On demands made by institutional investors for representation on the board, the minister was non-committal. "All options are open. Whatever is in the interest of the company will be done."

Newly appointed director Karnik said:  "We will ensure there is a business continuity, it's critical. Will get the company back on track. Government has moved quickly and decisively. Satyam incident is an aberration in the IT industry's history. It is also important that customers get the support and we need to make sure employees stay in the comfort level."

Achutan added that "It's a crisis, will have to put company back on track".

Parekh said:  "There is a need to study the fundamentals of the company first. Lot of work needs to be done."

Parekh is likely to be elected as the Chairman of the board.

[dwarakesh]

Global economic meltdown has cut 50,000 jobs in Special Economic Zones

Talking to mediapersons, after inaugural function of ''ASSOCHAM SEZ Council Meeting'', organised on the eve of Vibrant Gujarat 2009 here, Mr Rajagopalan admitted that world wide economic recession has slowed down industrial growth in SEZs of the country and nearly 15 per cent job losses have been reported.

Mr Gopalan said, ''In last two years, the SEZs have attracted the investments worth Rs 90,000 crore and exporting over Rs.66,000 crore worth of goods and have been providing employment to 3.5 lakh workers. Of these employments, 50,000 have lost jobs because of world wide economic meltdown.'' However in a guarded voice, Mr Gopalan said, ''The job losses in SEZs are very less compared to unemployment generated in elsewhere.'' When asked, Mr Gopalan said, ''The economic recession has also resulted into hold up of investment even at national level causing lesser employment in SEZs as many industries which were likely to come up may be delayed.'' Major effect of economic recession was on export oriented industries as importers of affected countries like USA, European Union and Japan may cancel their orders or hold up them for a while, he opined.

When asked about remedial steps being taken by the authorities, Mr Gopalan said, ''We are considering several options, including allowing industries to sell their products in local markets (most industries set in SEZs are export oriented due to duty benefits offered there) to preserve employments. However, everything is at discussion stage only, nothing is decided yet.'' ''The Commerce Ministry may consider the exporters to allow export their goods to new venues than their original plan for which they got permission for duty benefits by setting up industries in SEZs,'' Mr Gopalan added.

Source- UNI

[sajiv]

Manipulated Satyam accounts for 7 yrs, confesses Raju 

Hyderabad: In his first confession to the police, the beleaguered ex-chief of Satyam Technologies B Ramalinga Raju has said that the turn of events following his admission of fraud have been unexpected. Raju had owned up the falsification in the IT major's books.

Raju has disclosed that he manipulated the accounts so that the company could get more business and that margin of amounts in the books increased every year. He has also divulged that the company's books were manipulated for as many as seven years.

A court, on Monday, postponed the hearing of Raju brothers' bail plea till January 16. Court also deferred the hearing of plea filed by police seeking the custody of Satyam ex-chief till January 16 as well.

Security Exchange Board of India (SEBI) had also filed an application in the court seeking permission to record Raju's statement as it has not questioned ex chief of Satyam yet. The court postponed hearing on SEBI's plea till January 16 as well.

Moving forward in their investigations into the case, CID, on Monday, started to probe Satyam's bank accounts in India. The Andhar Pradesh investigating agency also filed for the custody of Raju brothers and former CFO of Satyam.

According to sources CID is also probing the role of board of directors and auditors in the biggest ever fraud in the India IT sector. CID believes that such a big fraud cannot be done by one single person.

Meanwhile, the newly formed Satyam Board started its first meeting at the company's Hyderabad headquarters on Monday morning. On Sunday, the Ministry of Corporate Affairs had formed new Board with three directors including HDFC chief Deepak Parekh, former NASSCOM head Kiran Karnik and SEBI ex-member C Achuthan.

The newly formed Board is expected to chalk out the future course action of the fourt biggest Indian IT major. The Board is also expected to discuss the suitable person for the Chairman's post and appointment of other Directors if required. The Board is scheduled to brief the media in the evening.

Raju had earlier surrendered to Andhra Pradesh DGP and was in turn sent to CID custody. Ram Raju, brother of Ramalinga Raju, was also arrested by the investigating agency.

Both of the Raju brothers were slapped with charges of criminal conspiracy, cheating, use of forged documents, forgery and criminal breach of trust under the Indian Penal Code.

Raju had on Wednesday disclosed a financial fraud in the company to the tune of over Rs 7,000 crore by inflating profits and showing fictitious assets where none existed. The company's scrip has fallen nearly 80 percent since the revelation.

[nithyasubramanian]

Raju grilled, confesses to police

Saytam's founder and former chief Raju today reportedly confessed his crime to the Andhra Pradesh Police during his custodial interrogation. In his confession, details of which are available exclusively with TIMES NOW, Raju said that the turn of events were unexpected and it forced him into acquisition. He said that he had expected the rise in land prices that would help Maytas to be in stable condition, but because of the overall economic slowdown, it did not work out; and that drove him to move for the takeover of the two Maytas firms. Sources said, Raju confessed to manipulating the accounts for the past seven years eyeing more business, however, he denied bribing anyone.

[VelMurugan]

Kerala IT cos eyeing Satyam clients

It is advantage time for IT companies in Kerala. With Satyam under a cloud, the software companies in the state are busy trying to win over clients of the tainted IT bellwether even as they are flooded with job applications from Satyam employees.

A few large IT companies in the state either work with Satyam or are competitors. The head of a leading IT company told IANS on the condition of anonymity, that across the IT industry efforts to take over Satyam's clients in India or abroad has begun and they were also at it.

"We are working aggressively in India and abroad for this," the IT firm chief said.

Meanwhile, efforts to reassure nervous clients have also begun. VK Mathews, chief of IBS Software Services -- one of the biggest IT companies in the state -- told IANS they have started reaching out to clients to explain their position as part of confidence building measures in the wake of what happened at Satyam.

"One should not generalise with what happened to Satyam. The need of the hour is for regulating agencies like Securities and Exchange Board of India (SEBI), Registrar of Companies, and the Company Law Board to step in and see that such things do not happen again," he added.

Kerala is home to around 200 IT companies of varying size that employ close to 25,000 people and have clients across the globe.

Last year, software exports from the state crossed Rs 1,000 crore (Rs 10 billion).

Founder president of Group of Technopark companies (GTECH), Sunil Gupta said that since Thursday, the day after the Satyam chief admitted to a Rs 70 billion fraud, he has been getting frantic calls from clients.

"We work with Satyam for five companies in the country and we are their competitors in the US. The biggest fallout of this would be that clients will now insist on very strict insurance clauses, thereby leading to increased insurance premiums which will be borne by companies like us," said Gupta, CEO of the Kerala operations of the New Jersey-headquartered Collabera IT company.

Both Mathews and Gupta said since the Satyam bubble burst, they have been flooded with resumes of Satyam employees.

"Satyam employees are of high quality and certainly we will be hiring those who are suitable depending on our requirements," Mathews said.

Source : IndiaTimes

[VelMurugan]

Don't poach Satyam clients: Nasscom

Software industry body Nasscom on Monday asked IT companies to desist from weaning away clients of Satyam Computer, which has got a new board to put the house in order.

The IT industry in the country was "mature" enough to resist such undesirable practices and poaching on the customer base of Satyam, whose business continuity needs to be ensured, Nasscom President Ganesh Natarajan told reporters.

He advised the IT industry body members to desist from making "unsolicited offers" to Satyam's customers.

The government had taken the right steps in the matter and the Nasscom was hopeful that the new board with proven track record of its directors would restore credibility of Satyam by taking care of the liquidity aspect and uninterrupted business schedules, Natarajan said.

It was important to ensure that in the outsourcing, customers did not lose their faith in Indian companies, he stressed.

Source : IndiaTimes

[VelMurugan]

Satyam gets new board

The government installed a new board at fraud-hit Satyam Computer Services on Sunday following the arrest of the company's co-founders in the wake of India's biggest corporate scandal.

Police stepped up their investigation into the case, having charged Satyam Chairman Ramalinga Raju and his brother B Rama Raju with criminal conspiracy and forgery on Friday after Raju said profits had been falsified for years and quit.

The brothers are being held in jail after they were taken into judicial custody until January 23. Chief Financial Officer Vadlamani Srinivas was also sent to the same jail on Sunday after he was taken into judicial custody until January 23, his lawyer said. Police raided the residences of the arrested executives in Hyderabad, the southern Indian city where Satyam is based, as part of the investigation, VSK Kaumudi, Inspector General of Police told Reuters.

The new Satyam board will meet in 24 hours and its chairman will be selected by its three members, who include Deepak Parekh, chairman of the Housing Development Finance Corp, said Corporate Affairs Minister Prem Chand Gupta. The other members are Kiran Karnik, former president of technology lobby group, the National Association of Software and Service Companies, and C Achutan, a former official of the regulator Securities and Exchange Board of India (SEBI).

"These three members will chart the future course of action for the time being," Gupta told a news conference in New Delhi. New York-listed Satyam welcomed the reconstitution of the board, saying it would ensure the outsourcer's continued operations, help maintain customer confidence and staff morale, and restore investor trust.

"This is a vital stabilising development for Satyam, and it marks the beginning of a new chapter in the company's history," a company spokeswoman said. "It is the best news we've received in the past four weeks."

The accounting fraud at Satyam was revealed by Raju last Wednesday. The company's stock has since been battered and its valuation plunged to $330 million at Friday's market close from more than $7 billion six months ago.

The scandal has cast a cloud over foreign investment in Asia's third-largest economy and over its once-booming outsourcing sector, which posted stunning sales growth for years and lavished investors with handsome returns.

Back on the rails
The agenda of the new board's meeting was not disclosed but analysts said it would likely focus on ways to retain
existing clients such as General Electric and Nestle and how to guarantee working capital.

Stand-in Chief Executive Ram Mynampati said on Thursday the scandal had pushed Satyam, which specialises in business software and back-office services, into a crisis of unimaginable proportions and that liquidity was not very encouraging.

"The aim of the board will be to ensure continuity of business and confidence of clients as clients always gets concerned with such incidents," Karnik told television channel NDTV Profit. "Satyam will be back on the rails."
Analysts said the quick move to name new board members was a step in the right direction.

"I think it's a first good move towards restoring client confidence," said Sudin Apte, country head of Forrester. "But we still have a long way to go." In a five-page letter sent to stock exchange authorities last week, Raju admitted about $1 billion, or 94 per cent of the cash and bank balances on Satyam's books at end-September, did not exist. Gupta said the government would soon make a decision on appointing additional board members.

Several securities fraud class action lawsuits have been filed in the United States on behalf of investors who bought Satyam American Depository Receipts (ADRs) in the last five years.

Source : IndiaTimes

[Kalyan]

Satyam scam: Infosys, IBM, Accenture may benefit most

Infosys Technologies is expected to gain the most among the top Indian IT players from Satyam's loss of credibility. Although there will
Satyam be no shift towards one single provider, Infosys' reputation as a firm with high corporate governance standards as well as its US listing is expected to stand it in good stead when customers make a choice, said analysts.

On Wednesday, when Ramalinga Raju confessed to cooking Satyam's books, Infosys was among the few IT stocks that ended higher. The stock was up 1.7% to Rs 1,187, as compared to Wipro and TCS that ended almost flat at Rs 243.30 and Rs 503.70, respectively. HCL Technologies, the other top player, was down 15%.

"The senior management of Infosys has come out quite aggressively in the media on maintaining high corporate governance standards," pointed out Ascendia Consulting principal analyst Alok Shende. However, the hitch to this could be Infosys' premium pricing, which some analysts said was 10-15% higher than Satyam's rates. This, along with a substantial customer overlap, could work in the favour of the number one IT exporter, TCS.

"It is not going to be as easy as that to say any one vendor will benefit. TCS probably has the largest overlap of clients. General Electric (GE), General Motors and Citigroup are all clients of TCS as well as Satyam. Citigroup is also a client of Infosys but it is small," said an analyst with a foreign brokerage. Infosys had stopped servicing GE because it was unwilling to compromise on its billing rates and provide services at the discounts GE was looking for. This one of the reasons why GE had moved more work to Satyam, recollected an analyst.

Apart from Infosys, the US-headquartered India-based Cognizant Technology Services is also well poised to take advantage of the situation.

Overseas brokerage Stifel, Nicolaus & Company, Inc said in a report that Cognizant could have an edge over Infosys if it emphasises its US domicile status, as opposed to Infosys which is domiciled in India. "In e-mails to employees, management is already highlighting its US-listed status, and compliance with Sarbanes Oxley laws," according to a report from brokerage firm CLSA. Wipro had also sent e-mails to all salespersons asking for aggressive messaging to customers that Wipro is ready to take on operations running at Satyam, according to CLSA.

IBM and Accenture, which have a significant offshore presence, will be the biggest gainers, said some analysts. IBM has around 75,000 employees in India and Accenture, around 35,000. "Best positioned to benefit from such a situation, we believe, are the large, global, well-known MNCs like ACN (Accenture) and IBM. We consider them of tier-1 calibre in terms of offshore capabilities, but their size, stature, brand, global reputation, and high-level client relationships (particularly ACN) differentiate them, in our view, and will make them more attractive to worried clients than even the tier-1 offshore firms like INFY and WIT (Wipro)," said an analyst at Stifel Nicolaus.

These analysts believe the MNCs stand to benefit more because they are large (with the ability to take on Satyam's revenues), established and with "sterling reputations" and "recognisable brands" that put them in the best position to reassure worried clients.

courtesy : economic times

[Kalyan]

Satyam may get a lifeline

The government has offered to throw a financial lifeline to tottering Satyam Computer Services to help it pay salaries to
some 53,000 employees and run its operations. The new three-member board, which parachuted in to save the company, highlighted the lack of credible accounts even as the jailed former finance chief confessed that its fixed deposits were fictitious.

"The government will consider all aspects, including giving financial support, once it receives firm proposals from the newly-constituted board," commerce and industry minister Kamal Nath told reporters, noting that state-run financial institutions owned stakes in Satyam and it provided employment to a large number of people.

A senior finance ministry official, who declined to be named, told ET that help could be in the form of "temporary direct or indirect liquidity support" to the company, which has been brought to the edge of ruin after its founder and former chairman B Ramalinga Raju admitted to a nearly Rs 7,000-crore financial fraud.

On Monday, the new board set about the "daunting" task looking for a new CEO and a new finance chief to run its day-to-day operations. Late on Monday, there was speculation that Vivek Paul, former vice chairman of Satyam's larger rival Wipro Technologies and now a partner with buyout group TPG Capital, could be the CEO. Before Mr Raju's revelations last week, Mr Paul had been speculated to be sizing up Satyam as an acquisition target.

Mr Raju's admission last Wednesday sent Satyam's shares reeling. They plunged 94% in the two trading sessions following the disclosure before ending 44% up on Monday. The Satyam scam has besmirched the squeaky-clean reputation of the Indian IT sector, besides dragging down the wider stock market.

Mr Raju and his brother, B Rama Raju, were arrested in Hyderabad last Friday, and the government has sacked Satyam's three-member board and will replace it with a new 10-member board. It has already named three members of this board – noted banker Deepak Parekh, former Nasscom head Kiran Karnik and former Securities and Exchange Board (Sebi) member C Achutan.

"Our immediate priority is to appoint an independent accounting firm within the next 48 hours to restate the accounts for at least three to four years. We have also asked for an extension of the company's third quarter results," Mr Parekh, who heads mortgage lender HDFC, told a news conference.

SATYAM, which counts Nestle and General Electric among its clients, urgently needs cash to pay salaries and meet other expenses, and could face trouble raising funds from banks in the wake of the fraud revelations. The company's famed cash pile is non-existent and Mr Raju has said he had inflated the company's revenues and profits for years.

The new board said although the receivables — the money due to the company from clients — appeared to be enough to fund its immediate working capital needs, it was unsure whether these are overstated receivables or actual funds.

"If (the receivables) come on time, liquidity will be sufficient. But these need to be authenticated... Most of the clients are AAA (top-rated ). So we can ask them for advance against receivables," Mr Parekh said.

courtesy : economic times

[Kalyan]

Satyam may get a lifeline

The new board said it can look at the possibility of Satyam's merger with another company, although that would be tough until they ascertained
the actual size of the company and its liquidity position. The main priority for now was to restore confidence of customers, employees and investors.

"Satyam has a lot of marque customers, so we want to ensure continuity of services without much disruption," said Kiran Karnik.

The Satyam fraud came to light when the company announced a plan to buy two firms linked to Mr Raju's family last December 16. The scam is being investigated by a number of government agencies including markets regulator Sebi, the Registrar of Companies (RoC) and the Income Tax department.

The Satyam episode has also sullied the name of global accounting firm PricewaterhouseCoopers, whose accounting arm in India had been the company's long-time auditor and is being investigated by government agencies.

Satyam's former CFO Srinivas Vadlamani, who was arrested at the weekend, told police in his confessional statement that Pricewaterhouse had never pointed out to any "deficiencies" in the company's accounts.

"Two days prior to the board meeting, I used to have a discussion with statutory auditors (Pricewaterhouse ) who used to share with me their audit findings , (and) based on those findings, I used to take comfort and certify accounts," he said.

Mr Vadlamani added that Satyam's fixed deposits were fictitious and were managed with an understanding between the company's internal audit section and the top management.

"There are certain responsibilities like handling bank deposits that were directly handled by the chairman and managing director. I was specifically asked not to look into that area of operations," he said.

courtesy : economic times

[dwarakesh]

Satyam board to change top management

The newly constituted board of Satyam today swung into action and decided to change top management, seek advance from clients and explore all options, including merger, to salvage the company which is hit hard by Rs 7,800 crore scam and the resultant liquidity crunch.

The government appointed board has already zeroed in on two accounting firms, one of which would be mandated in the next 48 hours to restate the accounts and work on third quarter results. The board also decided to appoint a new CEO and a CFO at the earliest.

At the same time, Prime Minister Manmohan Singh took a review of the developments of the company during his meetings with market regulator Sebi's Chairman C B Bhave and top government officials and directed the Cabinet Secretary K M Chandrasekhar to coordinate the action on the issue.

A day after they were put on the board, Deepak Parekh, Kiran Karnik and C Achuthan went to the headquarters of the IT firm and took a first hand account of the situation in the meeting of the board and took a number of decisions, crucial to keep the company afloat.

Announcing the steps to be taken over in the next few days, Parekh told reporters: "Our top priority is to restore confidence of customers, employees and investors by ensuring business continuity."

The government would soon induct more members in the board which thereafter would decide on Chairman, he said.

Meanwhile, Commerce and Industry Minister Kamal Nath said in New Delhi that government was willing to consider all options, including financial support to the company.

Asked if merger could be considered to overcome the crisis, Parekh said, "The option of merger is always open." The board has also not sought any immunity for the company from lawsuits.

[nithyasubramanian]

Ashok Ganguly may join Satyam Board

The government is believed to be considering the name of Ashok S Ganguly, a noted industry expert and a former chairman of Hindustan Lever (now Hindustan Unilever), for appointing him as a member of the board of Satyam Computer Services.
Sources in the Ministry of Corporate Affairs said Ganguly's name was being considered by the government. When contacted, Ganguly said he has not yet been approached by the government to join the board of the beleaguered IT major.
The government, as per the Company Law Board (CLB) order superseding the board of Satyam, is required to appoint up to 10 members to steer the company out of trouble.
The government has already appointed a three-member board comprising HDFC chairman Deepak Parekh, former Nasscom president Kiran Karnik and former past presiding officer of the Securities Appellate Tribunal (SAT) C Achutan to salvage the IT company.
Talking to reportes after the first meeting of the three-member board at Hyderabad, Parekh indicated that board will elect a chairman after appointment of more members.
Corporate Affairs Minister Prem Chand Gupta too after announcing appointment of three-member Satyam board had said, "further appointments to the board may be made subsequently as required."

[nithyasubramanian]

Did SEBI Ignore I-T's red flag on Satyam?

The rot in Satyam saga seems to run deeper. Reports suggest that the Income Tax Dept was on its heels from early 2002. The IT Department from Hyderabad had conducted search operations across several offices of Satyam in 2002 and found that Raju had opened multiple benami accounts through relatives and friends. Fixed deposits to the tune of Rs 29.5 crore were found in those accounts. The funds were frequently used for trading in Satyam shares, flouting the insider-trading norms. According to the sources, the then state government of Chandrababu Naidu chose to ignore the report, since Ramalinga Raju was reportedly close to Naidu.

[sajiv]

India appoints new Satyam bosses

The Indian government has appointed three leading businessmen to the board of scandal-hit software firm Satyam.

This comes two days after Delhi sacked the entire board of Satyam, a private company, as its founder and former chairman was arrested.

Ramalinga Raju and his brother Rama, also a former Satyam director, were arrested on charges including criminal conspiracy and forgery.

Mr Raju admitted last week that the firm had been falsifying its accounts.

He said the company had exaggerated its cash reserves by some $1bn (£661m).

The affair is India's biggest-ever corporate fraud.

'Restore credibility'

The three new directors are Deepak Parekh, head of the Housing Development Finance Corporation; Kiran Karnik, the former boss of technology trade group Nasscom; and C Achuthan, a former member of the Securities and Exchange Board of India.

"The board's first priority would clearly be to restore the company's credibility, customer confidence and employee morale," said Corporate Affairs Minister Prem Chand Gupta.

"Such a board will provide the necessary vision, along with responsible and accountable leadership to the company in this hour of crisis."

Mr Gupta added that further appointments will now follow.

"I think it's a first good move towards restoring client confidence," said analyst Sudin Apte of financial research group Forrester.

"But we still have a long way to go. We still have to see how quickly the reality of this scandal comes out in the world."

Fighting for life

The Raju brothers have also been charged with criminal breach of trust and falsifying documents.

They have been remanded in custody until 23 January, and could face life in prison.

Indian police have also now detained Vadlamani Srinivas, Satyam's chief financial officer, for questioning.

The company, which employs 53,000 people, is now fighting for its life.

Its clients include Nestle, General Electric and Ford.

Satyam's shares fell to 11.50 rupees on Friday, their lowest level since March 1998.

Last year they hit a high of 544 rupees.

[nithyasubramanian]

PM steps in, calls high-level meet over Satyam

The Prime Minister has called for a high-level meeting on the Satyam scam. The meeting will be held later on Tuesday.

Key Cabinet members -- Home Minister P Chidambaram, Foreign Minister Pranab Mukherjee, Commerce Minister Kamal Nath and Deputy Chairperson of the Planning Commission Montek Singh Ahluwalia will attend the meet chaired by the Prime Minister.

On the agenda is the impact of the Rs 7000 crore fraud on India Inc. Union Minister Kamal Nath has already said that the government would consider all aspects, including financial aid, in helping the crisis-ridden company.

Before the high-level meet, PM Manmohan Singh held discussion with Commerce Minister Kamal Nath and is believed to have reviewed the Satyam issue.

Meanwhile, the sources say that the CID is searching the offices of PricewaterhouseCoopers in Hyderabad. The sources have also said that the investigating agency is all set to call former independent director of Satyam Computer, Rammohan Rao in for questioning.

Former interim CEO of Satyam Ram Mynampati is also likely to be quizzed by CID, the sources added.

On their part, the Registrar of Companies (RoC) is reported to have submitted its report to the Centre on the preliminary probe into the Satyam scam.

Sources said that RoC Hyderabad submitted its report on Monday night to Minister of Corporate Affairs Prem Chand Gupta and this report would be the basis for handing over the case to the Serious Fraud Investigation Office (SFIO).

The SFIO is already assisting the RoC in the probe, but is being formally handed over the investigations.

The Registrar of Companies in Hyderabad, where the head office of crisis-ridden Satyam is located, will be a part of the SFIO team to probe the case, sources added.

[nithyasubramanian]

World Bank gives much of Satyam projects to TCS

The World Bank has hired another Indian IT major Tata Consultancy Services to do much of the work previously being done by Satyam, which has now been debarred by the bank from doing business with it.

"We have hired Tata Consultancy Services (TCS) to do much of the IT work that Satyam used to do," a World Bank spokesperson said.

The IT major had bagged much of the Satyam's project through competitive bidding early last year, thus indicating that the World Bank is not specifically targeting Indian IT companies, as being alleged in certain quarters.

In a statement issued on Monday the World Bank had revealed three Indian IT companies that have been debarred from doing business with it. Besides Satyam, which has been debarred for eight years beginning September 2008, Wipro (beginning June 2007) and Megasoft Technologies (beginning (December 2007) have also been banned for four years each.

Two other Indian companies, Nestor Pharmaceuticals and Gap International (both non-IT entities) and one individual Surendra Singh, too, have been debarred by the global apex monetary institution.

The action was initiated against these entities and an 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 the Bank staff.

In all, the World Bank has debarred as many as 111 companies and individuals from across the world from doing or bidding for its projects.

[VelMurugan]

Satyam scam: IBM, Accenture to gain

International Business Machines Corp and Accenture Ltd are in a stronger position to win new contracts after the fraud at Satyam Computer Services Ltd tarnished the credibility of India's outsourcing industry.

Companies seeking to outsource some of their operations -- such as handling customer calls or testing software -- may turn to US firms in the short term as they grow wary of the risks of working with smaller companies abroad, said Moshe Katri, an analyst at Cowen and Co IBM and Accenture are the two largest US computer-services providers.

"It's going to create a temporary or near-term crisis of confidence in the sector," said Katri, who is based in New York. "This is really the first time this has happened in our industry."

Satyam Chairman Ramalinga Raju's admission that he fabricated $1 billion in cash and assets will force India to strengthen corporate-governance regulations or risk undermining an industry that took a decade to develop, Katri said.

Satyam, based in Hyderabad, writes software and manages computer systems for clients such as ArcelorMittal, the world's largest steelmaker, and Nissan Motor Co, Japan's third-biggest carmaker.

"This to some extent pollutes the entire industry, just gives other US and Europe-based companies another reason to be hesitant before sending business to an emerging market," said Karl Keirstead, an analyst at Kaufman Bros in New York. "It's the last thing the Indian outsourcing industry needs."

'Breach of Trust'
Raju, 54, and his younger brother Rama were detained on January 9 on charges of forgery, breach of trust and crim
inal conspiracy. Indian Trade Minister Kamal Nath said the government may provide financial aid to safeguard jobs. Satyam, the nation's fourth-largest software exporter, employs about 53,000 people and has offices from the US to the UK, Brazil and Australia.

Satyam's clients are most likely to shift their business to other companies they already work with, said Dhruv Chopra, an analyst at Morgan Stanley in New York. That process will take time because outsourcing projects are often complex, especially if they involve people rather than technology, he said.

"In the near term, the likes of IBM and Accenture could potentially pick up share as companies go through their own due diligence," Chopra said. IBM and Accenture probably already work with a significant number of Satyam's clients, he said.

Share plunge
Satyam's American depositary receipts fell the most ever yesterday, losing $7.89, or 84 per cent, to $1.46 in New York Stock Exchange composite trading. Accenture, based in Hamilton, Bermuda, declined 70 cents to $33.03. IBM, in Armonk, New York, added $1.01 to $85.71.

Satyam spokesman Jim Swords declined to comment. Accenture spokesman Jonathan Zaback didn't immediately have a comment.

"We've been involved in the Indian marketplace from a services perspective for many, many years," IBM spokesman Ian Colley said. "We've been able to grow our business there very effectively." He declined to comment specifically about Satyam.

Satyam's 10 largest clients make up about 30 per cent of its annual revenue, said Frances Karamouzis, an analyst at researcher Gartner Inc in Stamford, Connecticut. The company reported sales of $2.14 billion for the year ended March 2008.

The company's clients include Citigroup Inc, General Electric Co, chipmaker Applied Materials Inc and Nestle SA, the world's largest food company. Spokespeople for those customers declined to comment.

The Satyam crisis hit India at a time when rising wages, higher rates of employee turnover and the global economic slowdown have already hurt the outsourcing industry, Karamouzis said.

The Indian government will need to improve corporate- governance regulations and outsourcing companies will have to overhaul themselves to win back customers' confidence, she said.

"You're buying people, and you're buying trust," she said. "You're buying a brand."

Source : IndiaTimes

[VelMurugan]

Govt hands over Satyam fraud case to SFIO

The ministry of corporate affairs on Tuesday ordered investigation into the Satyam scandal by the Serious Frauds Investigation Office Satyam(SFIO), a multi-functional investigating agency that has representations from the ministry of home affairs, Enforcement Directorate and the Intelligence department.

The government's decision came on the basis of a report it received from the Registrar of Companies in Hyderabad, that was assigned the work of inquiring into the affairs of Satyam Computer Services. "The SFIO will submit its report in 3 months," Minister for Corporate Affairs Prem Chand Gupta said.

The RoC had inspected the books of accounts and collected evidence against Satyam and its 8 group companies. Mr Gupta, however, refused to share any specific details of the RoC report.

Source : economic times

[VelMurugan]

PM, Kamal Nath hold discussion against Satyam backdrop

Prime Minister Manmohan Singh on Tuesday held discussions with Commerce and Industry Minister Kamal Nath and is believed to have reviewed the Satyam issue, a day after the minister came out in support of extending financial help to the beleaguered IT firm.

"The Prime Minister is closely following the developments on Satyam," a PMO source said.

The Prime Minister on Monday held discussions with Securities and Exchange Board of India Chairman C B Bhave and senior Finance Ministry officials. He also asked Cabinet Secretary K M Chandrasekhar to co-ordinate the government approach on the issue.

Mr Nath said on Monday that the government was willing to consider "all aspects" of helping the crisis-ridden firm since it was a question of saving jobs and an international Indian brand.

When asked whether the government could extend even financial help to Satyam, Nath said, "Of course. There are many jobs at stake and institutional stakes."

Satyam, with about 53,000 employees, is facing a liquidity challenge, said Deepak Parekh, a member of the government-appointed board.

Nath said it was up to the board to come up with proposals and a "package", which the government would consider.

Source : economics times

[VelMurugan]

RoC submits Satyam probe report to Centre

The Registrar of Companies here is believed to have submitted its report to the Centre on the preliminary probe into the
Satyam scam.

Sources said that RoC Hyderabad submitted its report last night to Minister of Corporate Affairs Prem Chand Gupta and this report would be the basis for handing over the case to the Serious Fraud Investigation Office (SFIO).

The SFIO is already assisting the RoC in the probe, but is being formally handed over the investigations.

The Registrar of Companies in Hyderabad, where the head office of crisis-ridden Satyam is located, will be a part of the SFIO team to probe the case, sources added.

Earlier on Friday, the Ministry of Corporate Affairs (MCA) dispatched the SFIO team, consisting advisers and inspectors, to Hyderabad to assist RoC in the Satyam probe.

The MCA has already ordered an inspection by the RoC (Hyderabad) of eight subsidiaries of Satyam, including Maytas Infra and Maytas Properties, the companies promoted by the family of disgraced Satyam founder chairman B Ramalinga Raju.

Earlier, Gupta had said the cases would be referred to the SFIO after receipt of a report from RoC, Hyderabad.

However, sources indicated that the probe would be handed over to the SFIO before waiting for a report from RoC, Hyderabad.

The minister had earlier said, "RoC (Hyderabad) has already seized voluminous documents from various premises of the company."

Source : Economics Times

[VelMurugan]

'Govt may give financial support to Satyam'

Troubled Satyam Computer Services, facing a liquidity challenge, may get financial support from the government, which is willing to consider "all aspects" of helping the crisis-ridden company, Commerce and Industry Minister Kamal Nath said on Monday.

Since it was a question of saving jobs and an international Indian brand, the government would consider all the proposals from the newly-constituted board, Nath said. When asked whether the government could extend even financial help to Satyam, Nath said, "Of course. There are many jobs at stake and institutional stakes."

Addressing a press conference after the first meeting of the government-appointed board in Hyderabad, Deepak Parekh said the liquidity issue would need immediate attention. Nath said it was up to the board to come up with proposals.

He said the Satyam fraud is not a slur on India Inc because the country's corporate norms have passed the test of the Securities and Exchange Commission of the US and several other multilateral agencies.

IT company "once it receives firm proposals from the newly constituted board".

On Sunday, the government constituted a three-member board comprising noted banker Deepak Parekh, IT expert Kiran Karnik and ex-SEBI member C Achutan. More appointments are to be made.

Source : economictimes

[nithyasubramanian]

Headhunters after Satyam techies

HYDERABAD: Even as the Satyam fiasco triggered fears of job and pay cuts among the employees, they are getting a breather in the form of offers pouring in from various firms.
Thanks to the social networking sites, many of the employees, even if they have not applied, are getting interview calls from many Human Resources (HR) personnel in the software sector. The HR personnel are, in fact, on a headhunt in the 'web-world' not adhering to Nasscom's directive not to poach Satyam employees in the critical time.
"There are around 30,000 employees who registered in networking sites like Orkut, LinkedIn and Facebook. This serves as the perfect database for those who are on headhunting," said Archana S, a junior HR manager working in a reputed software firm in the city.
Explaining that this was a tried and tested method, she articulated: "This kind of recruitment is being done to employ people for lower and mid-level positions." They could build a huge database in this manner, which would be of some help in the future too, she added.
"I got six offers from various companies urging me to forward my resume in the past three days. Some are even offering part-time employment and 'work from home jobs' till the crisis gets over,'' a Satyam employee working in the SDE Prameela Techno Park at HiTec City told Express. Many of her colleagues too got offers in a similar fashion, she added.

[nithyasubramanian]

Focus on Maytas Infra's projects

HYDERABAD: After the embattled Satyam, its most important subsidiary, Maytas Infra's fate could hang in the balance, with the Andhra Pradesh government ordering "assessment" of its capability to execute Rs. 30,074 crore worth of projects spanning irrigation, roads, rail and ports.

The A.P. government's review comes in the wake of the Satyam fiasco and the Opposition charge that Maytas Infra was favoured in these projects on the ground that those in high echelons of power had stakes in it.

Corporate Affairs Minister Prem Chandra Gupta too had announced that investigations by the Registrar of Companies and the Securities and Exchange Board of India would encompass Satyam and its seven subsidiaries, including Maytas Infra.

The increasing scrutiny would make it difficult for Maytas Infra to raise resources to deliver such a huge order list, given the beating its credibility took. In fact, Chief Minister Y.S. Rajasekhara Reddy had to step in on Monday to allay fears of a Minister, an MP and an MLA over the capacity of the company to take up works relating to the deep water port at Machilipatnam.

Maytas Infra has witnessed a phenomenal growth in a short span. From a turnover of Rs. 100 crore in 2003, it registered Rs. 223 crore in 2006, Rs. 600 crore in 2007 and Rs. 1,600 crore in 2008. Telugu Desam Party spokesman and Rajya Sabha member M.V. Mysoora Reddy says the sudden rise reflected two aspects — diversion of funds from Satyam to Maytas Infra and the government going out of its way in handing out projects. "It became the fastest growing infrastructure company in the country in a short time of two years."

Among the Rs. 30,074 crore projects it "won" either on its own or in joint venture with other companies are the now controversial Rs. 12,000-crore Hyderabad Metro Rail, the Rs. 9,222-crore packages of the Pranahita-Chevella Lift Irrigation Scheme and the Rs. 1,590- crore deep water port at Machilipatnam, all during the last six months ending December 2008.

Apart from a slew of irrigation projects, there are the Rs. 120-crore road project on nomination basis, the Rs. 1,800-crore Gautami power, the Rs. 9,900-crore Machilipatnam thermal power and the Rs. 3,375-crore Godavari drinking water scheme.

In favouring Maytas Infra, Dr. Reddy alleges that the government adopted a method of giving it a 'prior briefing' on bids and making it a leading partner in joint ventures with its share ranging from 50 to 100 per cent depending on the size of the project. "The tenders were virtually tailor-made for Maytas and difficult for the competitors, all for commissions or benami partnerships."

But Major Irrigation Minister Ponnala Lakshmaiah refuted these charges and said the department had evolved an elaborate foolproof method of calling tenders and for close monitoring of the progress. Bills were cleared only after a visit by department engineers, inspection by quality cell and third party experts.

Of the Rs. 19,171 crore projects bagged by Maytas Infra, those worth Rs. 4171 crore were in progress, agreements were signed in the case of those amounting to Rs. 11,500 crore.

[Kalyan]

A real tough job for new auditor

The new external auditor of Satyam will face an uphill task. The new auditor will have to check each and every aspect of earlier
submission and claims about the company's finance, after revealation of the accounting fraud, said KN Memani , former chairman and country partner of Ernst and Young.

Satyam CMD B Ramalinga Raju revealed last week that accounts of the company were fudged for the last seven years. He said the management overstated revenue and profit, even the cash balance was inflated. While the audited account as on March 31, 2008, showed the company had a cash balance of Rs 5,361 crore, in real term it had no cash, not even to pay salaries.

So, Memani said, the new accountant will not only ask for the cash balance in the company's account from the bank, which is a normal practice, but will also visit the bank's premise to find the details. The accountant will not believe the receivable claims by the company. They will confirm the receivable due from the customers directly. He will also check the credential of client firms, Memani added.

In the present scenario, there could be fictitious clients, which could give underwriting of large dues. A senior auditor of a global firm said on condition of anonymity (as his firm is one of the two firms selected to carry out the audit) that there could be some foreign firms, which would have given fictitious orders to Satyam, (in consultation with Raju) to inflate revenue . Such firms will continue to exist on the book.

Therefore, just by checking via e-mails might not give the complete picture , unless the client is well known. Otherwise, he said the auditor needs to inspect sites of the clients. He added that the new audit firm will have to prepare accounts afresh. It cannot depend on previous year's accounts. Even for expenditure, it has to start afresh. This will make the task difficult.

courtesy : economic times

[nithyasubramanian]

Price Waterhouse office searched

Documents, CDs containing information on transactions with Satyam seized

PwC claims "its office in South India has not been raided"

Says it is fully cooperating with the agencies

HYDERABAD: The Crime Investigation Department (CID) of the Andhra Pradesh police on Tuesday conducted searches in the office of PricewaterhouseCoopers (PwC), whose Indian arm, Price Waterhouse, is Satyam Computer Services auditor, at Jubilee Hills here.

The CID officials seized documents and CDs containing information on transactions with Satyam.

The searches by a team of two Deputy Superintendents of Police and three inspectors, led by N. Balaji Rao of the Economic Offences Wing, began around noon and continued well into the evening.

The role of Price Waterhouse, has come under the scanner following a confession by Satyam's former Chief Financial Officer, Srinivas Vadlamani.

He said that though the accounts were manipulated for years to show "fictitious and unreal" fixed deposits, the statutory auditor never pointed out any deficiencies.

The CID officials took the help of the PwC staff in locating files and other documents containing information on Satyam.

In a statement, PwC claimed that "its office in South India has not been raided" and that it was assisting the agencies investigating the outsourcing firm.

It was holding discussions with different agencies for providing information requested by them, it said.

"We are fully cooperating with the agencies and providing whatever information/documents/materials that have been asked for," the statement said.

Coordination meeting
Even as the searches were on, CID Inspector-General V.S.K. Kaumudi held a meeting with officials of the Registrar of Companies (RoC) as part of efforts to coordinate and share information with other investigating agencies.

Asked if there was any move to arrest Satyam Vice-President G. Ramakrishna, who was named by Mr. Vadlamani, Mr. Kaumudi said anybody could be questioned and arrested, if the need arose and there was evidence to establish their complicity in the fraud.

Mynampati for U.S.

The former interim Chief Executive Officer of Satyam, Ram Mynampati, has left for the United States after obtaining permission from the newly-appointed Board of Directors to negotiate with the company's customers.

[Kalyan]

TCS to gain most from Satyam fiasco: Edelweiss

Edelweiss expects Tata Consultancy Services to garner maximum revenue from Satyam Computer's pie as it has the highest client overlap
with the latter. Infosys, it says, would perhaps gain less than Wipro given its lower client overlap and greater selectivity.

Edelweiss, in a recent report, says that up to 40% of the Satyam revenue pie can get redistributed among other players (i.e. up to $1 billion) on an annualised run-rate basis by the end of Q4CY09/FY10. "Given the gradual exit patterns, this may be effectively $500-600 million of actual outflow through the year (as not all of this gets out in the beginning itself or not all contract exits are upfront)," says the report.

It adds that "it appears that among Indian IT vendors, TCS seems well-placed to garner maximum revenue pie (about $115 million in FY10 or 2% of FY09 revenues)". Wipro and Infosys follow behind with about $95 million and $80 million respectively (also, within 2-2.5% of their FY09 IT-services revenues), it notes.

The brokerage is of the view that all the large technology players would not gain to the same extent as a lot depends on the "pricing discipline" as well as the "overlap of their strengths and clients with those of Satyam". It feels that "Infosys may prefer to stay away from those contracts that it believes will dilute the quality of revenues (read: very low billing rates)".

Cognizant, it says, could benefit relatively less given its limited strength in Satyam's mainstay - ERP, manufacturing, and presence in emerging markets
. Likewise, HCL Technologies may not be a beneficiary as its entrenchment in ERP is relatively low, it adds. Besides, clients are more responsive to corporate governance issues putting Infosys, TCS and Wipro at relative advantage among Indian players, says the domestic brokerage.

courtesy : economic times

[nithyasubramanian]

Pricewaterhouse says Satyam audits unreliable

MUMBAI: PricewaterhouseCoopers, auditors of the troubled outsourcing giant Satyam Computer Services Ltd, said Wednesday that its audit reports for the last eight years relied on potentially false data provided by the company and should be disregarded.
"Our audit reports and opinions in relation to the financial statements for the Audit Period should no longer be relied upon," Pricewaterhouse wrote in a letter to Satyam's new board of directors, which was filed with stock exchanges in India and New York, as well as government and regulatory authorities in India.
On Jan. 7, Satyam founder and former chairman B. Ramalinga Raju confessed to doctoring the company's books for years.
Satyam's balance sheets were riddled with "fictitious" assets and "nonexistent" cash and contained a $1 billion gap that could no longer be concealed after a deal intended to save the struggling company was abandoned, Raju said in a letter to the company's board.
Pricewaterhouse said Wednesday that it had relied on information from Satyam's management and as a result its assessments of the company "may be rendered inaccurate and unreliable."
Raju and his brother B. Rama Raju, who served as Satyam's chief executive, as well as Satyam's former chief financial officer, Srinivas Vadlamani, have all been arrested on charges including cheating and forgery.
On Tuesday, senior police official V.S. Kumudi said that the offices of PricewaterhouseCoopers in the southern Indian city of Hyderabad, where Satyam is headquartered, were being searched.
Pricewaterhouse said there was no "raid" at its office and that it was cooperating fully with investigators.

[Kalyan]

Satyam's loss could be TCS' gain

One company's misfortune might well be another's opportunity. It is widely believed that many scam-hit IT firm Satyam Computer's clients
will migrate to competitors such as Infosys, Tata Consultancy Services (TCS) and Wipro, over a period of time.

According to a recent Edelweiss Capital report, TCS is likely to garner maximum revenue from Satyam Computer's pie as it has the highest client overlap with the latter. Infosys, it says, would perhaps gain less than Wipro, given its lower client overlap and greater selectivity.

Up to 40% of Satyam' revenue pie can get redistributed among other players (i.e. up to $1 billion) on an annualised run-rate basis by the end of the quarter of the current fiscal, the report says.

"Given the gradual exit patterns, this may be effectively $500-600 million of actual outflow through the year (as not all of this gets out in the beginning itself, nor do all contracts exit upfront)," says the report.

The broking house is of the view that all large IT services majors would not gain to the same extent as a lot depends on the pricing discipline as well as the overlap of their strengths and clients with those of Satyam. "It feels that Infosys may prefer to stay away from those contracts that it believes will dilute the quality of revenues," the report said.

There are very few clients who have exclusive vendor-relations with Indian IT companies. Of Satyam's revenues coming up for re-negotiation from clients having multi-vendor relationships (that is having project tie-ups with other Indian firms), there is greater probability of 50% of such contracts going the other vendors' way as switching costs are lower and comfort is higher, the report adds.

For example, Citibank and GM are clients of both Wipro and Satyam. It is likely that these relationships will significantly shift in favour of Wipro. About 25% of Satyam's exclusive clients (one vendor client) are likely to shift to newer vendors, says the report. Among top Indian IT vendors, TCS is well-placed to garner maximum revenue pie (nearly $115 million in FY10, or 2% of FY09 revenues).

Wipro and Infosys follow behind with around $95 million and $80 million, respectively, (also within 2-2.5% of their FY09 IT-services revenues), notes the report. Cognizant, according to the Edelweiss report, could benefit relatively less given its limited strength in Satyam's mainstay — ERP, manufacturing and presence in emerging markets.

HCL may not be a beneficiary as its entrenchment in ERP is relatively low, it adds. Besides, clients are more responsive to corporate governance issues putting Infosys, TCS and Wipro at relative advantage among Indian players, says the domestic broking house.

courtesy : economic times

[Kalyan]

Top Satyam bosses fly out of country


Satyam's former interim CEO Ram Mynampati is not the only one to quietly go abroad. Two other senior staffers of Satyam are also
currently out of India.

While senior vice president and director Virendra Agarwal has gone to Singapore, another senior VP and director Keshub Panda has pushed off to London. Mynampati, now in the US, is an American citizen. Most of his immediate family members also have US passports.

Satyam insiders claim that all three executives have journeyed overseas to reassure clients and make collections for bills due.

"But the possibility of their travelling overseas to avoid questioning by the police and other regulatory bodies cannot be discounted," a senior Satyam staffer admitted. He felt that the chances of Mynampati ever returning are very remote.

It is learnt that the three decided to go abroad on January 9. Satyam insiders claimed that letters to clients were dispatched after Ramalinga Raju quit.

The letters counselled the clients to bear with the situation in Satyam and generally sought their support.

"Between January 7 and 9 phone calls were made to clients. But making phone calls is one thing and interacting in person is quite another. In fact, some clients wanted presentations from the company in person. So it was decided that they would go and physically meet them," a senior Satyam staffer said.

For Satyam, 62% of all business comes from the US where Ram Mynampati will have to meet scores of clients. Europe contributes over 20% of the business and Keshub Panda looks after this region. Virendra Agarwal looks after Asia Pacific/Africa/Middle East markets which account for over 15% of Satyam's business.

Meanwhile, senior staffers of Satyam who had said that they were happy after hearing of government-appointed directors have now changed their status message to "feeling less unhappy" compared to their state after Raju left. These staffers confessed that there was still a vacuum in the company. "With the appointment of new directors, there is at least a cheque-signing authority in the company but without a full-time CEO, there is no day to day decision-making authority," a senior manager admitted.

"Maybe the government will step in and provide some liquidity for the time being. But if clients and investors do not feel comforted, then there is very little chance of the company being able to stand on its feet," a senior Satyam staffer said.

The fact that the entire top level leadership of Satyam is under a cloud has added to the sense of disquiet among staffers.

courtesy : economic times

[Kalyan]

Satyam fiasco may raise political storm

Just like the Enron scandal, the dizzyingly complex fraud perpetrated by Ramalinga Raju has acquired clear political overtones.

And just like Enron chief executive Kenneth Lay, who was endearingly called 'Kenny boy' by president George Bush, brought image deficit for the Republicans, the Satyam scandal is threatening to engulf the ruling Congress in Andhra Pradesh.

Ramalinga Raju, once the poster boy of Andhra Pradesh, was promoted by the TDP government led by Chandrababu Naidu as a rival to Narayana Murthy of Infosys in Karnataka. But it was left to the Congress government led by YSR to invest crores of public money into Satyam's sister concern, Maytas, led by Raju's son. In over four-and-a-half years, the Andhra government has pumped in around Rs 30,000 crore in infrastructure projects led by consortiums headed by Maytas.

The controversial Hyderabad metro project was awarded to Maytas and the government pledged to invest Rs 12,000 crore. Unlike its competitors, Maytas demanded no returns. Instead Maytas promised to give the state government Rs 30,000 crore over 15-20 years.

Delhi Metro Rail Corporation chief E Sreedharan had warned in last September that a huge scandal was brewing in the Hyderabad Metro project. "The Hyderabad Metro project is being cited as a successful example of BOT approach. Here, I would like to caution that the example of Hyderabad Metro is quite misleading as the negative viability gap funding has resulted solely on account of 296 acres of prime land being made available to the BOT operator for commercial exploitation. This is like selling family silver.

Apart from the fact that this might lead to a big political scandal sometime later, it is apparent that the BOT operator has a hidden agenda that appears to be to extend the metro network to a large tract of his private land holdings so as to reap a windfall profit of 4-5 times the land price," Mr Sreedharan had said in a letter to the Planning Commission.

Irrigation projects were also awarded to Maytas by the state government. Sources say the company was awarded infra contracts without any experience to its credit. The Pranahita Chevala lift irrigation project in Ranga Reddy district for Rs 9,200 crore and an all weather port project at Machlipatnam were two other big projects that Maytas was rewarded with.

Slow to take off due to financial issues, it was only last April that YSR laid the foundation stone for the Machlipatnam project. The project is being promoted by a consortium led by Nagarjuna Construction Company in which Maytas has 26% stake. The consortium includes SREI and Sarat Chatterjee group. The consortium is to develop 7,000 acres of government land as SEZ.

A worried Congress is attempting to lay the blame for Satyam's prominence on the TDP. But the Congress will find it difficult to explain its promotion of the company by awarding it key infrastrastructure projects without proper scutinty or flawless procedure.

courtesy : economic times

[dwarakesh]

Philippine firms eye Satyam deals

BPO companies in Philippines are eyeing Satyam clients. The billion-dollar revenue fraud which has come as a body blow to Indi
an IT sector is being viewed as an opportunity by these companies.

BPO firms in the Philippines are hoping to make capital by getting some of the Satyam's business from the West.

Leading politician Representative Joseph Santiago said the unravelling of the massive revenue fraud at Satyam Computer Services would dissuade multinational companies from seeking BPO services in India. He said firms in the Philippines could reap the bonanza with more Western firms diverting business to the Southeast Asian country.

The disclosures about Satyam would "force Western firms to rethink their plans to do new business, or contract out additional back office work to BPO providers based in India", Congressman Santiago said in a press statement.

"The Philippines is in a superb position to capture whatever outsourcing business that India stands to lose on account of Satyam's troubles," said Santiago, chairperson of the House of Representatives information and communications technology committee.

Soon after the Mumbai terror attacks too there was speculation in the local media that IT firms in the Philippines would be the beneficiaries of the uncertainty caused by the attacks and security concerns of international corporates. Global property consultant CB Richard Ellis had then said that the attacks would likely drive more business to the Philippines as multinational firms re-evaluated the security situation in India.

Santiago, a former chief of the National Telecommunications Commission, boasted that the IT industry in the Philippines had remained free of any taint.

Many Indian software companies, including Wipro and Infosys, have set up BPO offices and call centres in the Philippines taking advantage of lower operational costs there. Also, as more and more companies resort to 'out-tasking' or the farming out business processing functions piecemeal to smaller outfits, the Philippines has emerged as a destination of choice due to its infrastructure and English-speaking work force.

[dwarakesh]

No bailout package for Satyam, confirms govt

The government on Thursday ruled out any bailout package for crisis-ridden Satyam Computer, but assured to do everything required to save jobs under the framework of its responsibilities.

"This is a decision that the new board of Satyam would take. This government is not going to directly or indirectly subsidize wrong-doing and fraud in Satyam," minister of state for industry Ashwani Kumar told reporters on the sidelines of a Petrotech-2009 conference.

When asked, is government not in favour of a bailout package for Satyam as such, Kumar said that the new Satyam board "... are the ones to decide. The government would try and support within the framework of its responsibilities and do whatever it can to preserve and save jobs and to protect the good name of India in corporate sector".

He said, "The government will try to ensure to the extent possible that the brand equity of the country and Stayam in terms of its intellectual capital is preserved and the jobs are secured to the extent possible".

The minister said, "I do believe that Satyam aberration should not in any way take away from the great success story of India in the IT sector."

Earlier speculation was rife that the government is considering a package of up to Rs 2,000 crore to bail out Satyam Computer. But shortly after the Prime Minister Manmohan Singh's review meeting on Satyam on Tuesday, there was media speculation that government would be considering a financial assistance ranging between Rs 500 crore and Rs 2,000 crore but the PMO office declined to comment on it.

However, commerce minister Kamal Nath, who attended PM's review meeting, had said that the government was open to consider a financial package for Satyam Computer.

The official sources had also indicated that the government appointed Satyam board had written a letter to the finance ministry raising concerns about the liquidity crunch in the troubled company.

Satyam has 53,000 employees and needs over Rs 500 crore a month to meet the staff cost. Satyam had plunged into a deep crisis following the founder-chairman B Ramalinga Raju's admission that he fudged the company accounts to the tune of Rs 7,800 crore.

[dwarakesh]

Vivek Paul leads race for Satyam CEO post

Vivek Paul, former vice-chairman of Wipro and CEO of its global IT business, has emerged as the front runner for the post of CEO of Satyam Computer Services. To sweeten the package, sources close to the development said that Paul was being offered a 5 per cent stock option in addition to an attractive remuneration.

Sources said the new board and the government want a person who understands the clients and the market closely for the top post, for which Paul was considered. It is, however, not clear whether he will be interested. He does not want to come back to India as he is involved with raising some funds in the US.

Paul, who reportedly resigned from Wipro due to differences with Chairman Azim Premji, may not accept the offer since he likes to work independently.

"With the government calling the shots here, in addition to a top-heavy board, he may not want to dirty his hands," said a very senior industry player.

"He surely must have been offered the post, but so would have other prominent IT and non-IT people. It's a prestigous role. If one can sweeten the deal like offering a stake, they could make it worth his while," said the CEO of an IT company and added: "But I do not think Paul would take up the role, especially since anyway, he was the highest paid employee at Wipro".

The buzz about Paul grew stronger since he recently quit as partner at TPG Capital, one of the world's leading private equity investment firms. Paul was not reachable for comments.

Prior to joining TPG in 2005, Paul grew Wipro's global information technology, product engineering, and business process services segments to over $1.4 billion, and led its listing on the New York Stock Exchange (NYSE).

In May 2005, he disclosed he was evaluating other positions. On June 29, he formally put in his papers. The following day, Wipro announced that Paul was leaving and that A L Rao would become the chief operating officer. The Wipro stock on the Bombay Stock Exchange (BSE) dropped almost 3 per cent on the news of Paul's departure.

Paul has been ranked among the best managers in the world by BusinessWeek, among the top global business influentials by Time magazine and among the top-30 most respected global CEOs by Barron's.

"Many in the industry believe that when the company is battling for survival, someone within the industry and someone who understands the software industry in India would be a right choice rather than bringing someone from the US. There is no point in getting people from outside there are no dearth of people in India who are even today actively involved with the It industry," said a top industry source.

Meanwhile, among various names doing the round in the market include former chairman and CEO of Mphasis Jaithirth 'Jerry' Rao

[Kalyan]

Stop meddling, second guessing about Satyam: Narayana Murthy

Infosys mentor N R Narayana Murthy on Thursday called for a halt to "comments" and "second guessing" on Satyam and leave it to its new
Satyam board and employees to revive the company.

Murthy told reporters on the sidelines of India's technology leaders conference here that he had stopped commenting after the new set of directors took over Satyam to revive it. "There is no need to discuss on issues concerning the impact Satyam will have on the IT industry," he said.

"Satyam Computer has a new board of Directors in Kiran Karnik, Deepak Parekh and C Achuthan and it is best to communicate with them," he said.

Now that the board has been appointed, "rest of us should stop second guessing. The trio has a lot of experience. They have handled major crisis. I would rather leave it at that," Murthy said.

"We should give confidence to Satyam, its employees and leaders by distancing ourselves from making comments," the Executive Chairman of one of the largest software exporters and the NASDAQ-listed company said.

Asked what lessons the IT industry could learn from the Satyam crisis, he said the new Board of Directors need a couple of days to assess the situation and take decisions. "The rest of us should stop meddling and giving opinions".

On the future of Satyam, he said it was for the Board members to discuss it as they have "good ideas".

He ducked a query on whether Infosys would show interest if Satyam was up for sale. "They have a board of directors. They are eminent," he said.

courtesy : economic times

[Kalyan]

Satyam's senior management executive Ram Mynampati has informed the government that the troubled IT firm would need Rs 150 crore to
meet insurance liabilities of its US employees.

"We have received a mail or two from Mynampati. They indicated that they would need something of the order of Rs 150 crore to take care of the health insurance liabilities of the employees in the US," Economic Affairs Secretary Ashok Chawla told reporters here.

Mynampati is in the US to talk to clients and reassure them of the company's ability to continue serving them, besides restoring confidence among employees in the aftermath of a Rs 7,800 crore financial fraud disclosed by founder Ramalinga Raju last week.

Chawla said there is no immediate plan for a government bailout for Satyam, although Commerce and Industry Minister Kamal Nath had indicated that the government was willing to extend financial support to the company.

"Not at this stage," Chawla said when asked if the government would offer any bailout to the IT firm now.

Asked if the new board has already approached the government for Rs 150 crore assistance, he said: "Board members have got down to work... they will be getting in touch with the Ministry of Corporate Affairs."

The company's new board, comprising Deepak Parekh, Kiran Karnik and C Achuthan, had agreed on meeting financial needs as a top priority.

On whether the government would provide any indirect support to Satyam, Chawla said: "It depends on the board coming to kind of conclusion; what is their requirement and the actual accounts indicating what it is".

He said the real picture on the company's "receivables" has to the revealed.

courtesy : economic times

[Kalyan]

Satyam employees caught between devil & the deep sea

It's literally a case of being caught between the devil and the deep sea for the 53,000 employees at Satyam. This is the extreme hour of
reckoning when they have their loyalty for the company and brand on one side and perhaps their jobs and livelihood on the other.

While many have already begun sending out resumes in large numbers, experts see more wisdom in employees adopting the wait and watch policy rather than pressing the panic button. They believe that the employees, who were the key asset for Satyam during the good times, could definitely play a positive role in keeping the boat afloat during this period of crisis.

According to Ganesh Natarajan, CEO of Zensar and chairman of Nasscom, "The coming 48 hours will be very critical for the employees on the rolls of Satyam. The key factors for them are customer confidence, board stability and their salaries." In fact, the task of retaining and maintaining the existing client base has now fallen squarely on the shoulders of the employees.

Those involved in client interaction are being encouraged to keep customer interfaces going and to focus on the fulfilling the demands of their customers.

Experts are also warning employees against possible attempts by other large sized companies to use this period to making inroads into their client-base. Elaborating on factors that affected customer confidence, Natarajan said "it will not help customer confidence if a large number of employees jump ship at this point."

Most human resource experts are warning employees against leaving the company. While there are innumerable rumours that are making their rounds at the moment - especially regarding lay-offs and no salaries being paid next month - employees are being encouraged to wait for official information and watch the shape that the organization will take in the coming few weeks.

Experts point out that given the size and the stature of the company, the current problem will definitely elicit intervention on the part of government and prominent industry bodies to bail-out the employees.

"And though this is a first of its kind situation, we at Nasscom are ready to support the government in any steps that it takes to bailout the Satyam employees from the current crisis," says Natarajan.

"Even if it comes to the point where a sell-off or acquisition takes place, the valuation of the company will be based on the quality of the employees," says Arjun Srivastava, consultant at executive search firm, Egon Zehnder.

Experts also feel that individuals should not consider the tag of belonging to a tainted organization as a reason to quit the organization.

"Barring a couple of executives at the top-levels of the company, there is no reason why fingers should be pointed at anyone. Most mature recruiters can understand that individual employees may have had nothing to do with a situation like this," says James Agarwal, consulting director and head at BTI Consultants.

CEO of human resource consultancy, MaFoi Management Consultants, E Balaji also recommends that employees should refrain from taking knee-jerk reactions to the situation and focus on evaluating their opportunities given the current market conditions.

While a number of companies may use the situation to attract talent, this will not apply true for large numbers and people of all skill-sets. "In terms of job opportunities, for employees at the mid and senior level, within the technology space, there will be openings in tier 1-2 organisations and the same will be the case with people with niche skill sets.

The problem will arise for employees at the junior level and those with vanilla skill sets where the supply will be greater than the demand," says Rohit Ramani, director-sales and marketing at search and selection firm, Emmay HR.

courtesy : economic times

[sajiv]

Speedy arrest of Raju delaying probe: SEBI

The speedy arrest of disgrace Satyam Computer chief B Ramalinga Raju is delaying the market regulator's probe into the case, opined Pradyumna Kumar Reddy, lawyer of the Securities and Exchange Board of India (SEBI), on Wednesday, Jan 14.

Reddy's remarks added fuel to the already spread rumour that Raju was arrested in a haste to delay his interrogation by SEBI. SEBI's general manager Sunil Kumar has been appointed as the investigating authority in Satyam case. He arrived to Hyderabad on Jan 8 itself, within 24 hours of Raju's confession, Reddy told.

He also added that SEBI had issued summons to Raju to appear in Satyam's office on Jan 9, at 4.30 pm, but he did not turn up. His lawyer S Bharat Kumar represented him Raju was arrested on Jan 9 night."If the investigating authority could have recorded his statement on January 9, it would have been able to submit the same at the earliest to the executive director," Reddy said.

SEBI filed an application to record Raju's statement on Jan 12 when an application was filed by Raju's lawyer Bharat Kumar for his bail application. SEBI's plea will come up for hearing on January 16 along with his bail plea

Officials of the Registrar of Companies (RoC) raided Satyam's Mayfair office in Secunderabad on Wednesday, Jan 14.

OneIndia News

[sajiv]

No relieving letter for Satyam employees

Amid fear of job security Satyam employees are now facing another problem -- 'No relieving letters'. It is learnt from sources that Satyam Computers have said to employees that they will not be given relieving letter if they are planning to quit the ailing company.

Satyam sources said that the company fears that these employees are moving out with the client to new companies. Sources say that majority of the employees are searching for new jobs. All the major job sites are flooded with Satyam employees CV.

The news of Satyam planning to layoff about 10,000 employees to avert the crisis have made the matter worse. But the on-site employees have some relief after the client companies assurance of job security. The clients of Satyam Computers have promised the Satyam employees that if they are laid off by Satyam, the clients will absorb them.

But the employees in India face a different problem and fear. Sources are stating that when some of them are working honestly, most of them are worried about the security of jobs and progress of the company. Many don't feel like working because they will not be paid in Jan and Feb. The recent report of Satyam not paying two month's salary to its employees due to its weak financial status has also left many worried

Satyam CEO Ramalinga Raju confessed of 7,000 crore fraud on Jan 9 giving the Indian IT sector and Satyam clients a shock.

OneIndia News

[sajiv]

We need Rs 150 crore urgently: Satyam

Satyam urgently needs Rs 150 crore to meet insurance liabilities of its US employees, informed Satyam's senior management executive Ram Mynampati to Government.

"We have received a mail or two from Mynampati. They indicated that they would need something of the order of Rs 150 crore to take care of the health insurance liabilities of the employees in the US," economic affairs secretary Ashok Chawla told reporters, on Thursday, Jan 15.

Mynampati has gone to United States to speak with his clients and to reassure them to continue services with them. There is no immediate plan for a govt bailout package for Satyam, although Commerce and Industry Minister Kamal Nath had suggested that the govt was willing to extend financial support to the company, Chawla said.

New board members may get in touch with ministry of corporate affairs to seek Rs 150 crore assistance, Chawla opined. During a press conference, new board members had deliberated that funds for Satyam are the top priority now

[nithyasubramanian]

No 'satyam' in Satyam ex-chief's confession?

Over the last week, the Registrar of Companies has searched offices of Satyam in Hyderabad. Officials have stumbled upon tonnes of documents and digital records relating to the company's finance, secretariat and legal departments.

Was Ramalinga Raju's confessional statement an 'asatyam' or at least not the complete truth? Raju had claimed that he inflated cash and bank balances up to Rs 5,040 crore, and inflated profit over several years. Investigators are now asking:

How TDS certificates were issued by banks on the interest earned by fixed deposits if the fixed deposits were non-existent? (For example for 2007-2008, TDS certificates worth Rs 61 crore were issued on 257 crore rupees interest earned on deposits worth Rs 4,400 crore)

Ninety seven per cent of Satyam revenue are said to be from export earnings. For this all documents would have to be filed with regulatory agencies like RBI as softex forms. If the earnings are not received within six months of invoicing, they would necessarily have to be reported to the RBI

Raju mentioned that Rs 1,230 crore had been arranged by him. But in what form they were injected into the Satyam accounts is another question that needs answers

Why would a man like Ramalinga Raju lie to compromise his own position and push the company he built into dire straits? That's the question everyone is asking?

Sources say it was possibly a Hobson's choice for Raju. He had no funds, practically no stake left in the company and a takeover would have exposed him anyways.


courtesy : NDTV.com

[nithyasubramanian]

Raju in prison but yet to be logged out of Satyam

He may be in Chanchalguda jail in Andhra Pradesh on charges of criminal conspiracy and fraud, but Satyam on its official website is still presenting B Ramalinga Raju to the world as its Chairman along with all the members of the Board, which has been since disbanded.

Satyam is still to log out Raju, his brother and other members of his top management team, despite his quitting as Chairman on January 7 after admitting to a Rs 7,800-crore financial wrongdoing.

His brother Rama Raju, who quit on the same day and is also in the jail, is still being presented as the Managing Director and Member of the Board of the scam-tainted company on its official website.
The resignations were followed by the central government's stepping in to disband the company's board, which was left with three members after a string of resignations, and constitute a three-board member on January 10. Surprisingly a young website, constructed by his supporters after the Maytas fiasco, went off line immediately after Raju admitted to wrongdoing.

It is surprising that Satyam website also carries a press release welcoming the government's decision to appoint Deepak Parekh, Kiran Karnik and C Ahuthan on its board under "Board of Directors" link.

But the old structure is still intact on the same webstie. The new board after its first meeting yesterday announced that Mynampati, who was an whole-time director and was named interim CEO after resignations of the two Raju brothers, has ceased to be a board member and was continuing only as an employee of the company.

However, the company website under "Quick Facts" link lists the name of its executive directors as Ramalinga Raju, Founder and Chairman, Rama Raju, Co-founder and CEO, and Ram Mynampati, member of the board and president. It also names T R Prasad and V S Raju as its non-executive directors.

[nithyasubramanian]

Is the future dark for new Satyam recruits?

Ever since news of the Satyam scam broke, the future of 53,000 of its employees has been debated.

But there is a whole new set of people who want to be counted as well.

These new recruits were all set to join the payrolls in October 2008, but never heard from the company. (Watch)

"I just want the cry of a fresher to be heard. We just want the government to hear our voice. We are 7,000 in number and are nowhere today. We had thought Satyam was such a brand name; we had such hopes on them," said Madan Murthy (name changed), who received the Satyam recruitment letter.

Many of these aspiring IT professionals have huge educational loans to repay, and are now prying relatives and friends to answer. But the online community is a refuge.

'Satyam 2008', the community that knits thousands of campus recruits who were hired by the erstwhile IT czar in the summer of 2008, asks its members whether they want to work for Satyam at lower pay.

The fact that many bloggers reply to this with a ready yes tells the tale of these fresh engineering graduates in the wake of the Satyam fiasco.

From angry queries to suggested phone calls to the Andhra Pradesh CM and online petitions, they are doing all they can to address people who they think can intervene.

"Not a single company is ready to take us. If a company like Infosys has said that, where are we to go? We just want the government to look into our issue. We want an assurance from the company that we exist," said another Satyam recruit.

While all eyes are pinned on the new team that is supposed to bail out employees and stakeholders of Satyam, there is no mention of the thousands of campus recruits who were to begin a brand new career in the IT industry on the Satyam promise.

courtesy NDTV.com

[nithyasubramanian]

Satyam employee commits suicide fearing job loss

Apparently fearing that he may lose his job, a 23-year-old employee of scam-ravaged Satyam Computer allegedly committed suicide in Chennai, police said.

Vishwa Venkatesan, hailing from Salem, on Wednesday consumed poison. He was referred to the General Hospital where he died, they said.

Fear of losing his job drove him to take the extreme step, they said. Venkatesan had earlier also made similar attempts after the scam broke out early this month but was saved due to the timely action, police added.

courtesy NDTV.com

[nithyasubramanian]

Maytas out of Hyderabad metro?

"The seriousness with which they are working, I don't see any problems in the financial closure.''

Thus spoke N V S Reddy, MD of Hyderabad Metro Rail, just a few days before Ramalinga Raju dropped the bombshell on 7th January and sent Satyam's reputation on a downward spiral.

Sources in the government have told NDTV that the rail project's financial closure is unlikely to take place in March. Maytas was to pay 180 crore rupees as performance guarantee in March. But the government now has serious doubts over Maytas's financial muscle.

Sources say that the final decision will be a political one on when, how and whether Maytas will be told to abdicate the 12000 crore rupees project. Rebidding would be a loss of face also for the government that's already been accused of favouritism in granting the deal to Maytas consortium in the first place.

The government has already indicated that under no circumstances will it abandon the high-profile project. Andhra Chief Minister Y S Rajasekhara Reddy says: "Ultimately the interest of the work will have to be projected. If Maytas consortium cannot do this work or if there are clouds on Maytas, we will have to find ways and means how to do it in a very transparent way.''

The government admits the project has become very messy, quite unlike the elevated travel experience it promises to its passengers. The effort now is to ensure it is somehow put back on track.