Termed as the biggest scam in Corporate India, Satyam Computer, India's fourth largest IT company admitted of having committed a fraud to the tune of Rs 7,800 crore (Rs 78 billion). B Ramalinga Raju, founder and former chairman, in an e-mail sent to the employees on January 7 disclosed shocking details of accounts fudging and quit from his post.
While the existing board was subsequently dissolved, and Raju and his brother Rama Raju, and the company's chief financial officer Srinivas Vadlamani were remanded to judicial custody till January 23, the future of 53,000 employees remain in limbo.
The government on January 11 formed a new three-member board with noted banker Deepak Parekh, ex-president of Nasscom Kiran Karnik and former Sebi member C Achuthan as the members.
How badly will the Satyam fiasco dent the image of other IT companies in India? Will the new board be able to steer Satyam in the right direction, and stabilise the future of its staff? Will it be able to infuse confidence into the minds of thousands of Satyam investors?
In an hour-long chat on rediff.com on Monday, Ganesh Natarajan, chairman of National Association of Software and Service Companies, replied to such queries and other disturbing issues. Here is the transcript:
GANESH natarajan says, Hi friends Welcome to this chat
shaz asked, What will be the aftermath of this fraud in india
GANESH natarajan answers, at 2009-01-12 12:42:38If the Government continues to handle it as well as they have done and the Board is seen to be taking strong and positive actions, there is nothing to fear - the company will pull thru and the industry will not be tarnished
Bhupendra asked, How do yuo think will new board will be able to put back satyam on wheels? how you will restore prestige of satyam, clients faith, customer relations & employees faith? any strategy?
GANESH natarajan answers, The Board has many things to do foremost of which will be the restoration of confidence in the client and employee community. I am sure they will do that
Parth asked, Hi, How do you view the comments by Mr. Murthy / Mr. Mohandas Pai on Satyam Employee's ? Are the employee's to be blamed for such a scam at the managerial level ? Shouldn't Mr. Murthy be a bit sensical in making such comments ?
GANESH natarajan answers, We have already advised companies to avoid any poaching of customers or employees. And we believe that most of the employees would be true professionals who will always be welcome in any part of the industry
sujit asked, What is the FUTURE of IT Market & Outsource in INDIA
GANESH natarajan answers, The future continues to be bright - India has established a strong lead in IT and BPO and with the ongoing support of all our stakeholders we will maintain and enhance that
asimboral asked, I think its the only way to bail out Satyam by taking up by Gov of India with top level expert in as CEO.Satyam is not a loss making co and fundamental is robust and here Gov can do busines in line with PVt companies with 100 % tranperancy to show the PVT companies the model of business .What do you think and at the same time give highest punishments to any fraudstar both in PVT and GOV in future .for that NSA like bill should be introduced
GANESH natarajan answers, You are right - the company's fundamental capabilities are still strong and with the right leadership there are good prospects going forward
amadiga asked, what is the job situation
GANESH natarajan answers, It is a tough job market because of the global economic slowdown but people with good skills do not have to worry.
aquee; asked, IT IS RIGHT TIME TO BUY SATYAM COMPUTER SHARE IT IS RIGHT TIME TO BUY STYAM COMPUTER SHARES ?.
GANESH natarajan answers, Do consult a good broking firm - I have no answers to such interesting questions !
sss asked, Dear Sir, Do you think the new board will be able to steer Satyam out of crisis?
GANESH natarajan answers, Deepak Parekh, Kiran Karnik and Achutan bring proven skills to the Board and will take all the right actions in this time of crisis. And we as NASSCOM are prepared to extend our support to all of them
Cgi asked, TUm sab saale chor ho saalon
GANESH natarajan answers, I would certainly hope not !
Novice asked, NASSCOM may have advised companies to avoid any poaching of customers or employees. But, what is the harm in recruiting a Satyam employee... if he is talented enough with the required skill set ? Some ego getting into Mr. Murthy/Pai's heads?
GANESH natarajan answers, If a Satyam employee genuinely wants a new job, he will be given a chance like anybody else.
Shovon asked, Mr. Natarajan, a very good afternoon! Do you think that Satyam will be able to manage its cash flows in the short to mid-term so that it can retain its workforce and tide over the crisis? Also, what would be the implication, after World Bank has barred Wipro & Megasoft also, for India Inc. in the short term?
GANESH natarajan answers, They will certainly need some cash infusion to ease the liquidity position. The World Bank incidents are regrettable but are not going to have any deep industry impact
IIT_Delhi asked, Dear Sir, Good Afternoon I would like to know your view on Satyam company's future. What do you think, how long will take for this company to get back on track? What do you think is to be done to restore investors confidence in the particular company. I have invested 2.70 Lacs Rs in Satyam. I have 1800 shares at an average price of 155 Rs per share
GANESH natarajan answers, It is difficult to predict the future but they certainly have the right people at the helm of affairs and they will provide a plan for shareholders like you
rajansastri asked, Good afternoon Mr. Natarajan. This is Rajan Sastri from Pune. Is Satyam only the tip of the iceberg? The World Bank had already barred Wipro quite a long time ago from getting World Bank's direct contracts. Such crucial information was not revealed by Wipro either to the Stock Exchanges or to the public. It is not a question of mandatory requirements but of probity. Is responsible corporate governance limited to merely complying with the law? Is NASSCOM contemplating a set of guidelines for its members on governance? Notwithstanding NASSCOM, as the head of Zensar, would you have made public if the World Bank acted against your company in a similar manner?
GANESH natarajan answers, We have advised all companies to be transparent and appoint the highest standards in disclosure norms. I am sure all CEOs will be doing that
vsriks asked, Dear Mr. Ganesh: I am loyal satyamite and very senior person. I am sad at the way things are happening. Just because one person did, it is unfair to punish all the associates. I see media commenting about the entire satyam community as tainted and that too it comes from Mr. Murthy and Mr. Pai. 1. How are we going to stop it? 2. What is nasscom's role in protecting a organization like Satyam and its associates as it might happen to other giants also ? 3. Media is putting lot of false news and unverified news in their sites, causing lot of damaages to organizations. How is Nascom going to stop this? Again this can happen to anyone? & Finally, I would like Mr. Murthy and Mr. Pai to publicly apologize for letting loose statements on the entire satyam community. I would need your help for the same. I have written to the Prime ministers office and other relavant people including Mr. Mittal on the same.
GANESH natarajan answers, Dear vsriks, I dont think there is any need to worry. If all Satyamites continue to do good work, the customers will stay with you and gentlemen like Mr Karnik will do whatever is required to ensure business continuity
Cgi asked, Why cant we have 2 auditors sign off on the accounts instead of just one, just like we have in the case of banks? I suppose that would be a good step to reduce instances like this when the Auditors collude with the management?
GANESH natarajan answers, SEBI has already suggested a Peer review for significant companies which will take care of this
frb asked, This guy is a good friend of yours - do you still empathise with him?
GANESH natarajan answers, A human being has many choices in life - it appears that al intelligent man like Raju unfortunately strayed down a wronmg path
elango asked, whats the step on PWC
GANESH natarajan answers, It is a matter for the Chartered Accountants Institute once the facts are known
Debasish asked, Hello Mr. Natarjan, my question will be, how the entire IT Industry is looking into this event and what's your take on the overall compliance scenario of India vis-a-vis other countries
GANESH natarajan answers, Even in the US there have been major scams like Worldcom and Enron. The Satyam case is a problem pertaining to one promoter and should not tarnish the image of other Satyamites or indeed of the IT industry which has over 20 lakh associates
gaurav asked, hello sir,im vendor to the company for providing support services, have an outstaning with satyam to tune of 65 lakhs , wat will be process ahaead to recover the amount, as it is huge amount for me.?
GANESH natarajan answers, This is a question for the management to answer once the team is finalised by the Board. The new CFO when appointed will surely communicate with you
RahulKumar asked, Seeing the current development in Indian IT industry isn't it possible lot more companies are resorting the same way as Raju did all across the sectors.Why not there any strict rule & guidelines for the company to adhere is there.After this scam is the same in pipeline.Again is Govt planning to scan through all the companies to find out the realities of their balance sheet.
GANESH natarajan answers, The IT industry has always been known for the highest level of transparency and corporate governance . I am sure this will continue
dkk asked, Don't you think PWC is equally responsible for this fraud and must be involved 100% otherwise how on earth can an Auditor not detect such huge amount of discrepancies in the books for so long?
GANESH natarajan answers, We should wait for the investigation to be completed
Dinesh asked, What is NASSCOM's role in such frauds?
GANESH natarajan answers, NASSCOM provides support to the Government the Board and all stakeholders including the customers and employees. We would like business continuity to be maintained
Indrajeet asked, Kirank Karnik is a great man. His inclusion in the Satyam board is a welcome move. Your comments pls
GANESH natarajan answers, I agree - he has great sagacity and width of experience and can be trusted to take the right steps to maintain business continuity
India=scam asked, The whole Indian Software Industry is misguided. The companies, government and promoters have minted huge money and the employee has been made coolie - working on someone else project. These companies do not have any base. Nasscom has done only one job till date-filled the treasures of Microsoft in the name of illegal software.
GANESH natarajan answers, My dear friend, there is no need to get so cynical. We are a proud industry with 20 lakh proud professionals and we will continue to shine
Mallappan asked, Hi dont you think like satyam many more corporate giants are theieves.? So govt has to wait until a thief comes out and say his stolen properties and then only they will enter. I feel many more corporate giants are swindling the public money like the same way of satyam and may be more than satyam. satyam's holding is only 5%; but there are many cos who hold more % and hence may be more frauds.. what a pity? of indian govt. Why PC is keeping quiet??? he cant open his mouth becuz he is also hand in gloves with these frauds.... yes
GANESH natarajan answers, It would be unwise to expect Government to take over everything. The private sector has a role to play and should do diligently with full accountability
Deepak_Hasani asked, Dear Sir, Good Afternoon Do you think that Satyam has only profit margin of 3%? Or is it like most of the profit what Satyam earned, has been going to promoters companies (like Maytas)? If it is the true, that means, Satyam is still a profit making company and this itself can boost the investors confidence. What is your take on this?
GANESH natarajan answers, It is difficult to answer this till all the facts are ascertained thru investigation. I hope that the profits are much better than 3 % as is the case with all the other players in the industry
ITIndian asked, I m not IT savvy person as i am a Chartered Accountant as a professional. I request u to answer my simple querry that is on the profit margin of all IT companies. If Satyam declares it to be miagre 3% then what to take when Infy and TCS still declaring 20-25%??. Pls reply.
GANESH natarajan answers, Most companies - medium and large have double digit profit margins so there is no reason to suspect the profitability of the entire sector . It continues to be one of the best - for shareholders as well as employees.
sekhar asked, Mr Ganesh Natarajan, Good Afternoon!! Do you think that it is possible to fool auditors for years as per Mr. Raju's confession and show false money in the balance sheet or there is more to that. I mean the money did existed and was invested some where else by them.
GANESH natarajan answers, Good afternoon Sekhar. Clearly whatever fraud has bee perpetrated has been the work of some very devious minds but people of the stature of Deepak Parekh are well equipped to analyse this and find solutions
bhaskerb asked, I am observing from last wednusday,Goverament and all the departments are just consuntrating on the manipulation of the balance sheet.Why all these are not investigeting in the angle that money was diverted some where.
GANESH natarajan answers, I am sure they will consider all angles
Abhijeet asked, Suddenly everyone has started speaking about forensic accountants..yesterday some AP police official has also said that the whole satyam issue can be resolved only with the help of forensic accountants.Are you as the chief of NASSCOM planning to recommend to take help from forensic accountants ? The premier forensic accounting body in our country is also situated in Pune, where your head office is also located ?
GANESH natarajan answers, If the body contacts us with specific solutions, I would be happy to meet them in Pune
sitaramsitaram asked, www.goolti.com -------> REVIEWS of all Telugu owned visa sponsors in the United States of America and their agents in India
GANESH natarajan answers, This scam has nothing to do with any community or state or city - it is just an aberration
VIKGUPTA asked, DEAR
SIR , WHY NO ARRESTS HAVE BEEN MADE FROM PWC ... THERE IS A FEELING THAT THEY WILL GET AWAY LIGHTLY AS THEY ARE AN INTERNATIONAL FIRM AND COULD GET BACKING FROM THE US.
GANESH natarajan answers, Nothing can be done till the investigation is complete
ananth asked, Sir what will be the impact of this fiasco on brand India
GANESH natarajan answers, Brand India has been built assiduously by many sectors including IT for the last many years. The Govt and NASSCOM has shown that we mean business and will ensure that the brand of our country continues to shine
dvnmsharma asked, Sir,good afternoon. It appears that World Bank is systematically bringing all IT companies of Indian origin into an embarrasing situation. If conflict of interests is only issue with Indian IT industry, it is understandable. Do you expect any more fall of wickets in near future? If so, what is your strategy to bring back confidence in Indian IT industry? Can or Can't we stand on our own?
GANESH natarajan answers, Of course we can stand on our own and we will continue to lead the pack of outsourcing countries.
upl asked, Hi Whats your inputs for the start ups and Enterprneurs
GANESH natarajan answers, Entrepreneurs must stay on the straight and narrow road of truth and shareholder value and should not succumb to greed or engage in any bad practices
KMSatish asked, Hi Ganesh, am a technepreneur based in Chennai. We are working with the Indian defence and have an LoI for Rs. 1.3Cr for a product development. Used to talk to the VCs who asked us many questions including an LoI. Now we have delivered a PoC solution for which we have obtained Supply Order (SO) and also a Letter of Intent (LoI), the funders are blaming the market conditions. We are team of IIT alumnus with 15+ years of work ex. Can you pls advise us?
GANESH natarajan answers, Do send me a mail separately on this and I will be happy to advise
sitaramsitaram asked, I GUESS YOU ARE AVOIDING MY QUESTIONS AND BEING PARTY TO THE ACCUSED ... Mr Ganesh.. could Satyam also be accused of making profits via the use of the H1 visa program ?? Is the present Satyam issue, a need based expose. just so the totalization agreement between US and India gets into place ?? What about the employees on foreign assignments that have been sent by Satyam? What is being done to repartriate them back to our homeland ?? Your views ??
GANESH natarajan answers, Dear Sitaram, I have no idea of any H1 visa misuse. Employees on foreign assignments should continue doing what they have been sent to do without any panic !
ET asked, Would the members of the dismissed board be still allowed to work with the new govt. appointed board members? I believe such a scam cannot be pulled off by the Raju Brother's alone & would indeed include all the current board members , CFO's at least!
GANESH natarajan answers, I am sure the Board will take a view on each manageemnt team members and also appoint new people on the Board
harishankar_g@rediffmail.com asked, now, a question at a higher level. will the over reaction of sebi-govt panick the real entrepreneurs and make them take less risks
GANESH natarajan answers, This is a justified reaction and if it makes entreprenuers 100 % honest at all times that would be very welcome.
elango asked, How investors will belive the audit reports for Listed companies if what happended in Satyam's case ...Seems PWC also involved a major audit fraud ...
GANESH natarajan answers, One aberration does not mean that the entire IT or listed company segment should be suspect.
Durga asked, What is the issue if some company wants to offer better governance and project management to satyam's existing client..after all succeful business rules are getting the best out of a situation if it offers a great chance to sell your services. and above all, it will be a Indian company again who would be selling the service to the client who is in doubt to continue with Satyam or not..the attrition is high and client will be worried about his dedicated resources leaving the project...pls comment..If I try to move an existing client from satyam to my company and also ensure the country that all employees of the project will be given atleast 20 percent chance to occupy the positions in the project..will there be a complaint or conflict
GANESH natarajan answers, Dear Durga. That should be the customer;s decision. All we are saying is that you should not try to poach clients or employees if they dont have a problem since that will create more chaos
sitaramsitaram asked, Mr Ganesh.. could Satyam also be accused of making profits via the use of the H1 visa program ?? Is the present Satyam issue, a need based expose. just so the totalization agreement between US and India gets into place ?? What about the employees on foreign assignments that have been sent by Satyam? What is being done to repartriate them back to our homeland ?? Your views ??
GANESH natarajan answers, The totalization agreement is still not there between India and US and the H1 has no bearing on it
India=scam asked, what do you mean by Deep Impact. World banks decision will certainly have effect
GANESH natarajan answers, What I meant was that this decision of the World Bank against some companies and individuals will not necessarily create any problem with other customers
Ramprosad asked, Dear Sir , I am a IT trainer, student are worried about the job situation after Satyam scandal. What is the future of students who are persuing a career in IT now?
GANESH natarajan answers, There is nothing to worry - the market may be a little soft now but IT will certainly be a great career choice as the world economies start picking up
Krishna asked, Hi Sir, I'm an ex-employee of Satyam. I was fired couple of months back stating certain silly reasons and put the status as "Terminated". I have got offers from various companies but when stated i was terminated and cannot produce a Serice certificate, none are offering me a job. Now you clearly know the intent of Satyam management. We are already the Victims of mis-managed decisions. It has also come in medis..
http://timesofindia.indiatimes.com/Cities/Satyam_lays_off_100_techies_says_its_just_routine/articleshow/3690407.cms How can Nasscom help us.... My request to Current Satyam board to kindly look the issue with open heart and revoke the decision. We are not asking for a job but give us the relieving letters. So that we can get a job outside... Currently despite no issue of ours .. we are treated as people who have committed big crime....
GANESH natarajan answers, I will certainly take this up as soon as the new management team is known
vsriks asked, Dear Mr. Ganesh: 1. How do we ensure that people like Murthy stop for commenting on entire satyam community? Why are we not punishing them? it is wounding a lot to the associates.
GANESH natarajan answers, We have already said that we respect all Satyam associates and I am sure all of you are capable of getting jobs anywhere
Mohit asked, Is tehre any possibility of Satyam takeover by any other company or will the government take over.... also is there any chance of Satyam being closed?
GANESH natarajan answers, WE cannot rule out any possibility but we certainly have a strong Board to ensure positive outcomes
Raghuraman asked, Hi!How are you doing Sir?My question is ,Why do we have to say that the current Satyam scam really affect our Indian credibility?Were there not scams in different countries(even in US), it did not mean that anybody doubting their credibility.Why cant Satyam saga be taken as an isolated case?your views on the same
GANESH natarajan answers, It is indeed an isolated case and I am sure most stakeholders realise that. Howevere business continuity today and tighter governance standards will be required to tide over this crisis
subhash asked, namaskara sir
GANESH natarajan answers, Namaskara to Subhash
mk asked, Hi Ganesh, Pls let us know how can these type of incidents be prevented in future ?
GANESH natarajan answers, We should certainly find the loopholes in this case and plug them and ensure that all companies adopt even higher disclosure standards in future
GOD asked, Hi Ganesh... We would liketo see Satyam emerge stronger than before at least in its policies and processes and the crappy red tape should go and transparency should come in... Do u have any long term plans of overhauling not just accounting but other policies as well.....
GANESH natarajan answers, Thank you God I am sure the Government and SEBI will think about new control mechanisms which will also be put in place at Satyam
RANU asked, SIR, THE SENSITIVITY OF THIS ISSUE HAS LOT OF HIDDEN CONSEQUENCES AND MEDIA HYPE HAS TO BE CURTAILED. BECAUSE IN COUTRIES LIKE SINGAPORE WHICH IT HAS BECOME THE BIGGEST HEADLINE I HAVE EVER SEEN IN THE LAST 14YRS OF MY STAY HERE.LOT OF FOREIGN MEDIA IS MAKING THIS SITUATION A MOCKERY OF THE INDIAN CORPORATE AND TARGETING THE INDIAN IT SECTOR. SO THE INDIAN MEDIA HAS TO BE CAREFUL ABOUT IT WHICH I FIND THEM IRRESPONSIBLE
GANESH natarajan answers, Well we do have a very free press which is the strength of Indian democracy. It also places a responsibility on all of us to be very correct in our actions, This is true for the USA as well so do not worry about barbs being thrown at this stage
rott asked, There is word going around that Deepak Parekh was also involved in Satyam fraud and helped them with the false bank statements and he has now been appointed in the board to cover it up. How true is this? Satyam has had financial dealings with HDFC.
GANESH natarajan answers, I would encourage you to avoid getting biased by such runmours. Deepak is a paragon of excellence in the realm of Corporate Governance and is the nest choice to lead Satyam out of this crisis
nckcns asked, naam ke liye chat kholkein rakha hain.reply bhi nahi karar aha ...........
GANESH natarajan answers, Aap kya reply chahte hain bhaiyya ?
money asked, What is you opinion about Ramalinga Raju? How have been your interactions with him?
GANESH natarajan answers, An intelligent man who seems to have gone astray. We do not know his motivations at this stage
smarty asked, WILL MR. Raju still be part of Satyam or he is no more be a Satyam Director after his release
GANESH natarajan answers, Clearly he will not be a part of Satyam's future
Siv asked, Do you support a Govt bailout with Taxpayers' money?
GANESH natarajan answers, The image of India is also important . Government's actions are fully justified and the bailout plan will be finalised by the Board
satemployee asked, Dear Ganeshan I work for Satyam and I am ahardcore Satyamite. I head a part of the business in Europe and in my own instance competition despite delaring that they will not poach have been making backend maneouvers. As Nasscom wud it be possible to take a stance and convey it to elcinets as well as the competition not to poach as i very sytrongly belive we will be back in business
GANESH natarajan answers, I have personally been in touch with a few European CIOs and have communicated this message. However they are being advised by advisory firms to keep their options open . Hence do whatever you can to protect your turf !
bala123 asked, Hello Sir, What is the impack of global slowdown on India. How long you think this trend will continue? Has NASSCOM laid any guidelines to tacke the situation?
GANESH natarajan answers, Cost reduction measures and new products and service launches are part of this. But each company will have to come up with its own agenda for tackling the immediate problem
Enggr asked, Security/Data theft has been highlighted once again. In light of such events, don't you think that the quality of work outsourced to Indian IT firms will degrade. With Indian IT coolie's just testing some programs already developed by their foreign counterparts !! Where is the quality of work that people need ? Don't you think the brains of the current IT generation has rusted by either being on bench for monthts together or by the garbage project of UK , US , AUS based companies. ?!?!?
GANESH natarajan answers, I dont think any work or any project is garbage. And the quality of work has been going up steadily in both IT and BPO
praveer asked, how would you say that satyam can survive if they do not have fund to pay the salaries?
GANESH natarajan answers, I am sure they will find a solution - do not worry !
jay asked, Hello Sir, Will the STPI be extended after 2009-10
GANESH natarajan answers, We are keeping the pressure on and hope to convince the Government that the case for extension is very valid
satyamc asked, GudAfternoon Mr. Natarajan, My question is. Is it possible for one person like ramalingaraju to show false accounts so many years.If that is the case then we may have so many such ramalingaraju's to come or still exist in our country. Now how can we take actions or avoid to occur such kind of issues in coming years.
GANESH natarajan answers, It is difficult to avoid every possible crime but strengthening of the corporate governance standars is certainly required and will be done
Tom asked, Good afternoon; In a scenario such as Sathyam or Enron or any such, why can't a non customer consortium from multiple domains (to avoid conflict of interests) be formed and given constitutional rights in lieu of couple of board seats etc...
GANESH natarajan answers, The Government has done the right thing in appointing directors of repute and they will announce their actions and directions soon.
GANESH natarajan says, Thank you all for your concerns and your support, I can assure you that the future of the industry continues to be bright ! Good luck with your careers
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