The Satyam scam has started showing its deathly effects, almost literally. 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.
In the wake of the Satyam scam, the U.S banks and insurance companies have hit the panic button and have cancelled the credit card of almost all U.S. based Satyam employees.
Last week, employees in the US received a letter from Northwest Federal Credit Union that their credit card accounts had been terminated. In its communication, a copy of which is with ET, the financial co-operative said, “This decision is based upon our reinvestigation and reevaluation of your (employees’) credit information as it pertains to employment.”
While Ramalinga Raju’s purposeful 7000 crore fraud is of an unforgivable magnitude, the 53,000 employees do not have to be punished for no fault of theirs. The Government who is very concerned about these employees is even considering a bail out for Satyam, if needed.
Union Minister of State in PMO, Prithiviraj Chavan, said the Centre is at present concerned about the future of 50,000 employees of the disbaned Satyam.
Describing the Satyam scam as an “isolated case”, Chavan said the government will look whether its regulatory mechanism has failed somewhere.
“Inspite of our regulatory system, a crime has been committed by a determined CEO (of Satyam),” Chavan told reporters adding despite Banking regulatory, SEBI and Chartered Accounts, it was surprising that at no stage the scam could be detected.
With the accounts of Satyam having gone to the dogs, with the CEO having admitted his culinary skills in cooking the books of Satyam, the need of the time is to have an accounting firm verify the accounts of Satyam and bring to light whether the company was drawing in profits or was in a loss making scenario.
Satyam Computer Services will appoint a new accounting firm within the next 48 hours to work on restating the accounts and declare the December quarter earnings, a member of the new board said.
Working capital issues require immediate attention at the company, Deepak Parekh, a senior banker and one of the government appointees to Satyam’s board, told reporters after the first meeting of the newly constituted board.
There does seem some light at the end of the tunnel after all. Satyam which is currently synonomous to scam, has reportedly got some prestiguous and high budget new orders from clients. In the wake of the current news on Satyam, this seems to be really surprising. The company is learnt to have bagged two new projects.
An internal mail shows Satyam has received a pilot project from the Centre for Railway Information System, which if executed successfully would land it a contract valued at around Rs 2,000 crore. The second project is from Malaysian Airlines which is also said to be worth crores.
“Last week, all the employees were reeling under the spate of bad news. The government intervention has really helped alleviate the gloominess. Bagging of big projects will ensure free flow of funds,” said a person familiar with the development.
The major fear of the Satyam employees and investors slowly seems to be making its presence felt. With the Satyam fiasco questions are being raised over the reliability of the company and major international clients are looking out at other vendors to move their projects too.
Major clients of Satyam Computer Services, such as General Electric (GE), Nestle and British Petroleum, have started exploring alternative options such as moving work to other outsourcing vendors.
GE, the largest client for Satyam, is learnt to be evaluating options of inducting the Satyam team working on its IT project or convincing other IT vendors to merge this team with their resources to ensure continuity of work. A source familiar with the matter said talks are on with other outsourcing vendors. Satyam’s bigger rival Tata Consultancy Services (TCS) already provides services to GE.
Replying to an e-mail questionnaire, a GE spokesman said the company has no comment to offer.
Nestle, the world’s largest food company, has been a Satyam client since 2004. In 2007, it extended its engagement with the Indian IT firm for another three years, landing it a new multi-million dollar contract. The Switzerland-based company says Satyam has guaranteed it normal continuation of services and it also has robust internal resources to provide it necessary IT support.
However, it is not resting assured. “Alternative solutions are being considered and no disruption of Nestlé’s IT operations is expected,” a Nestle spokesman said in an e-mail.
Outsourcing analysts say clients are worried about continuity of their work being handled at Satyam where employees are looking for another job. “Clients are evaluating options as their business continuity is at risk. Other suppliers are also working overtime to poach some of these marquee clients,” sourcing advisory firm Everest principal Nikhil Rajpal said.
One man’s poison is another man’s food. This saying is highlighted by the way other IT companies are trying to take advantage of Satyam’s messy situation and try to shift the business of Satyam to them.
A few large IT companies in Kerala either work with Satyam or are competitors.
The head of a leading IT company said 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.
Kiran Karnik, who has been appointed as the one of three members in the newly constituted is all set to take quick actions and restore investor confidence in Satyam.
A post-graduate from Indian Institute of Management, Kiran Karnik was the President of NASSCOM – the premier trade body and the “chamber of commerce” for the IT software and services industry in India till 2008. In this role, Karnik worked closely with the industry, and the Indian central and state governments to formulate policies and strategies for the advancement of this sector locally as well as internationally.
Kiran Karnik has been recognized as the guiding force for the Indian IT industry during the outsourcing backlash. By providing perspective and background information, Karnik has been instrumental in promoting India’s technology strength to the world.
Kiran Karnik Board of Satyam Computer on Sunday said ensuring business continuity of the IT major will be the Board’s first priority which is likely to meet within 24 hours.
“The first priority of the Board will be to ensure business continuity. We also have to make sure that India continues to be a safe, secure and reliabledestination for IT ,” past Presidentof Nasscom Kiran Karnik told media.
Talking about the appointment of seven other members to the Board he said, “It’s too early to comment on this. We will have to consult with the government for that. As of now I have not received any communication
from the government in this regard.”
Kiran Karnik, who has been appointed as the one of three members in the newly constituted Board of Satyam Computer on Sunday said
ensuring business continuity of the IT major will be the Board’s first priority which is likely to meet within 24 hours.
“The first priority of the Board will be to ensure business continuity. We also have to make sure that India continues to be a safe, secure and reliable destination for IT ,” past Presidentof Nasscom Kiran Karnik told media.
Talking about the appointment of seven other members to the Board he said, “It’s too early to comment on this. We will have to consult with the government for that. As of now I have not received any communication from the government in this regard.”
The government today nominated noted banker Deepak Parekh, ITexpert Kiran Karnik and former SEBI member C Achutan to the IT company’s Board.
The three-member board would meet within 24 hours to decide on the remaining up to seven members along with the Chairman, Corporate Affairs Minister Prem Chand Gupta told reporters in a hurriedly called press conference two days after disbanding the truncated Satyam Board.
Karnik, the recipient of the Padma Shri awardalso said that the three newly named board members would meet as soon as possible and that the first priority is the arrangement of an operational management.
“I dont know when and where the Board will meet. Ideally, the Board meeting should be in Hyderabad,” he added.
Nasscom also welcomed the governments move to appoint Karnik as a member of the new Board. “He is still an active member of the the industry body. He had in depth understanding of the industry. his experience as an Industry insider will come in handy,”Nasscom Chairman Ganesh Natarajan said.
Karnik was the Managing Director at Discovery Networks in India from 1995-2001. He spearheaded the launch of Discovery Channel in South Asia in August 1995 and Animal Planet in 1999. Karnik has worked for over 20 years with the Indian Space Research Organisation.
Country’s second largest software exporter Infosys also welcomed the move. “I am happy that such illustrus people has been appointed to the board . Its a well thought off move to restore confidence and assure customers that services will be restored,” Infosys Director HR Mohandas Pai said.
So what do you readers feel, is it possible to turn around the mess created because of the Satyam scam.
Things are moving at a fast pace with the Government trying to take quick measures to control the damage caused by the Satyam scam. The board of Satyam had been dissolved and their board meeting stands cancelled. The government has elected three members to the board of Satyam — HDFC chief Deepak Parekh, former Nasscom president Kiran Karnik and former SEBI member C Achuthan–Minister for Corporate Affairs PC Gupta told reporters in the capital. Further appointments will be made subsequently as required.
“The new board will be fully independent, and will make its own assessment. The chairman would be decided by the board”,minister added while commenting on the powers granted to the new board.
Loading ...