New York: The massive fraud at India’s software services firm Satyam Computer faced brick bats in the foreign media with some saying that this episode could threaten investment from abroad in the country and is likely to cast a cloud over growth in its outsourcing sector.
“The scandal threatened to gobble up not just Raju, who resigned, but his company, Satyam Computer Services. Far beyond Satyam, it raised fears that similar problems might lurk in other Indian companies, particularly in its vaunted outsourcing industry,” American daily the New York Times said.
In what could be termed as the biggest corporate fraud, Satyam on Wednesday made a shocking disclosure of accounts fudging by its founder Ramalinga Raju, who then quit as chairman, leaving an uncertain future for the company and its 53,000 employees.
Raju, in a statement on Wednesday, said that Satyam’s profits had been massively inflated over recent years but no other board member was aware of the financial irregularities.
Quoting Jacob Rees-Mogg, the lead manager with Somerset Capital Management, a fund that specialises in emerging markets, NYT said, “[T]he fraud will make people even more nervous about investing in India and other developing markets”.
Meanwhile, the Wall Street Journal said, “[T]he chairman of one of India’s largest technology companies said he concocted key financial results, ... sending shock waves across India and likely prompting investors to question other corporate results as the once-hot economy slows”.