Chennai, January 8, 2009 (IANS)
admission of a Rs.70-billion ($1.4-billion) fraud
by Satyam Computer founder-chairman B. Ramalinga
Raju was a matter of hot discussion on the margins
of a diaspora conference here with some delegates
saying it raises doubts over the level of corporate
governance in India. "It's sure to raise
more questions on corporate governance,"
said the Chicago-based Sam Pitroda, who is chairman
of India's Knowledge Commission and is considered
the architect of the country's telecom revolution
of the 1980s.
"But it will be difficult to estimate its
likely impact on the outsourcing business in India,"
Pitroda told IANS on the margins of the Pravasi
Bharatiya Divas - India's annual conclave to connect
with its diaspora.
G.M. Vijayeavel, director with a Sri Lanka-based
firm, who is also here as a delegate, said he
was noticing many scams in India at regular intervals."Earlier,
we saw stock market scamsters like Harshad Mehta
and Ketan Parekh. Now it is Raju," he said.
"I would think twice before investing in
an Indian company."
Other members of the diaspora who are here for
the three-day event concurred, saying the Indian
software industry may face a "tough time"
as the Satyam fraud has cast a shadow on the country's
corporate sector. "The Satyam scam shows
some major manipulation of accounts, not just
by its chairman but also the management and auditors.
I have a question: what were the board members
doing?" queried a delegate.
According to him, the focus must be on the role
of regulatory agencies such as the Securities
and Exchange Board of India (SEBI), the Institute
of Chartered Accountants of India and the Reserve
Bank of India.
Upendra J. Chivukula, deputy speaker of New Jersey
General Assembly, said he was aware of similar
scams in the US and all of them had their genesis
in only one issue. "Wherever there is a laxity
in regulatory measures, such frauds occur."
Minister of State for Industry Ashwani Kumar
said the government and regulators concerned were
seized of the financial fraud at Satyam and that
action would be accordingly taken.
"We will take necessary steps to restore
the investor confidence in Indian companies and
also in Satyam Computer Services," Kumar
said, adding that the guilty would not be spared
and interests of over 50,000 employees would be
He, however, said that it was for the shareholders
to change the management and that the government
had no role on that matter.