Satyam fraud makes Nasscom tell IT firms ‘be transparent’

January 16th, 2009 - 4:17 pm ICT by IANS  

Bangalore, Jan 16 (IANS) The massive financial fraud by IT bellwether Satyam Computer Services has goaded the software industry’s representative body into issuing a wake-up call to its members across India and abroad.In a directive to its 1,200-odd members, the executive council of National Association of Software and Services Companies (Nasscom) asked them, especially those listed and accountable to investors, to be transparent and disclose much more than they have.

“The executive council met within days after the Satyam fraud came to light and decided to be proactive with respect to transparency and disclosures. We have sent out a message to all our members to disclose maximum. Even a trivial matter should be disclosed,” Nasscom chairman Ganesh Natarajan told IANS in an interview here.

To ensure ‘a one-off case’ like Satyam did not tarnish the Indian IT industry’s image, Natarajan said if the Hyderabad-based global software major collapsed, it would result in undoing what Nasscom had been building over the last 20 years.

“So we have assured our members that we are working with the government and other agencies (regulators) to ensure business continuity and the need to restore faith of all stakeholders, including investors,” he said.

Natarajan, who is also chief executive of global software solutions provider Zensar Technologies, said Nasscom was trying to ensure Styam did not collapse.

“We are doing whatever we can to see Satyam is able to retain its employees, customers and suppliers as it is our fourth largest software exporter and has marquee clients from the world over, including Fortune 500 firms.”

Natarajan said the government’s intervention and the speed with which the new Satyam board had acted to save the beleaguered firm, had sent the right signals to customers and other stakeholders that India would continue to be a talented and cost-effective destination for outsourcing software services.

“Satyam fraud is an extreme case in extreme situations. Such an incident has never happened in the past, it is unprecedented. It is a much larger issue. It is not merely about IT industry but about corporate governance.”

Nasscom has also been in touch with its counterparts in the US and Europe to address their concerns over the integrity of the Indian IT industry, he said.

“We are also talking to analysts about what we are doing to bring stability to the organisation (Satyam), to allow business continuity and to get to the root-cause of the problem, which is larger than the accounting fraud itself,” Natarajan observed.

“We have not seen the reality yet. I don’t have answers for what, why and how it happened. Investigations are on,” he added.

“We should not only consider this unfortunate case as a wake-up call, but also an opportunity to learn a lesson from it. If boom times of the last four-five years made us complacent about compliance, it is time to clean up and enforce best practices such as transparency, accountability and ethical way of doing business,” Natarajan asserted.

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