Post-Satyam, IT industry faces tough time, says diaspora

January 8th, 2009 - 4:48 pm ICT by IANS  

Ramalinga RajuChennai, Jan 8 (IANS) Satyam Computer founder-chairman B. Ramalinga Raju’s admission to committing a Rs.70-billion ($1.4 billion) financial fraud will raise questions about the the level of corporate governance in India, feel persons of Indian origin (PIO) at a conference of the Indian diaspora here. “It’s sure to raise more questions on corporate governance. It will be difficult to estimate the likely impact on the outsourcing business in India,” Sam G. Pitroda, chairman of the US-based C-Sam Inc, told IANS at the seventh Pravasi Bharatiya Divas (PBD) conference.

Other PIOs, who came here to attend the annual three-day diaspora meet, concurred, saying Indian software industry may face a “tough time” as the Satyam fraud has cast shadows on the country’s corporate sector.

“There has been a major manipulation of accounts on the part of Satyam management and auditors. The focus will be on all regulatory agencies like the Reserve Bank of India, the Securities and Exchange Board of India and the Institute of Chartered Accountants of India,” a software company’s chief executive told IANS.

Added G.M. Vijayeavel, director of a Sri Lanka firm: “In India, such activities happen at regular intervals. Earlier, we saw stock market scamsters like Harshad Mehta and Ketan Parekh and now it is Raju.”

“I would think twice before investing in an Indian company,” Vijayeavel said.

Added Upendra J. Chivukula, deputy speaker of New Jersey General Assembly: “Wherever there is a lax in regulatory measures, such frauds occur.”

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