Oz bank may have to write off losses incurred from Satyam fraudJanuary 21st, 2009 - 12:34 pm ICT by ANI
Melbourne, Jan.21 (ANI): The National Australia Bank (NAB) could be forced to write off millions of dollars invested in its off-shoring program as a result of the Satyam corporate fraud scandal.
According to Fox News, NAB is one of Satyam’’s biggest customers in Australia and has already made a significant investment on training and transition costs and redundancy payouts as part of its information technology off-shoring (ITO) program.
“This initial investment was meant to be repaid over the next five years with lower maintenance costs,” one source told The Australian.
“If NAB breaks out of the ITO wave 1 contract now, there will be large losses of that initial investment which can never be recouped,” he added.
Around 90 Satyam staff service NAB, with about 40 per cent based in Australia.
The bank has off-shored key technology functions to Satyam, exposing it to significant risk if this service were interrupted.
It will take at least a year for NAB to transfer the work in-house and that the relevant expertise doesn”t exist within the bank to service this. (ANI)
Tags: corporate fraud, fox news, fraud scandal, information technology, initial investment, jan 21, key technology, losses, maintenance costs, melbourne, nab, national australia bank, next five years, oz, redundancy payouts, relevant expertise, risk, staff service, technology functions, transition costs