Satyam - Not What They Said They Were - Sourcing Tip

Is it what business demands?
Byrraju Ramalinga Raju's shock resignation on Wednesday as chairman of Satyam Computer Services, which he founded and helped develop into India's fourth-largest computer software firm, and confession to fraud running into millions of dollars has threatened to undermine the remarkable growth story of the Indian economy in general and its information technology sector in particular. Raju, 53, confessed in a letter to Satyam's board of directors to inflating profits for years with "fictitious" assets and non-existent cash. The fraud, he said, began in an attempt to cover up a "marginal gap between actual operating profit and the one reflected in the book of accounts". It swelled over the years to "unmanageable proportions as the size of the company operations grew significantly". Raju said that about US$1.04 billion, or 94% of the cash listed in assets at the end of the company's second quarter in September, was fictitious. It simply didn't exist. Read more here.

Do you think this will scuttle investment offshore?

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Permalink Reply by Eric Gilson on January 9, 2009 at 10:49am

I have been targeting folks out of Satyam this entire week as we caught wind of this last Friday.

I can help Senior Engagement Managment team members flee that ship if you know of any.

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Permalink Reply by Maureen Sharib on January 9, 2009 at 11:10am

If I was sourcing out of them, here's how I would set them up in my work doc (from Hoovers):
Satyam Computer Services Limited (NYSE: SAY [ADR]; Mumbai: Full Quote)
Satyam Technology Center, Bahadurpallay Village
Qutubullapur Mandal, R.R. District
Hyderabad, Andhra Pradesh 500855, India
Phone: +91-40-5523-3505
Fax: +91-40-2309-7515
Primary US Address
1 Gatehall Dr.
Ste. 301
Parsippany, NJ 07054 United States (Map)
Phone: 973-656-0650
Toll Free: 800-450-7605
Fax: 973-656-0653
http://www.satyam.com
Satyam Computer Services doesn't have time to sit -- it's busy providing onsite, offsite, and offshore IT services. The company offers a wide range of information technology services, including software development, managed IT services, engineering design, data warehouse development, and systems integration. Satyam Computer Services provides its services to customers worldwide, but most of the company's sales come from clients in North America and Europe. Satyam customers have included GE and the US government. In early 2009 the company's chairman resigned after admitting that Satyam had doctored its books for years, with fictitious assets and cash leaving a $1 billion shortfall in the company's balance sheet.
2008 Sales (mil.) $2,138.1
1-Year Sales Growth 46.3%
2008 Net Income (mil.) $417.0
1-Year Net Income Growth 39.7%
2007 Employees 39,018
1-Year Employee Growth 36.3%

Then I would call the main number (no I would NOT use the 800 number!) to hear a recorded message:
"For a directory by last name please press 2..."
Press 2 and then hear:
Please enter your party's first four letters of their last name...
Don't! All you need to do is press two numbers and then wait - the phone directory spills with two!
The US office doesn't appear to be that large - it might take you a half hour or so to pull ALL the extensions down... then...figger out if the extensions can be converted to a direct dial and then...
WA-LA!
Call each one.
******
If all this seems too daunting (or time-consuming for you - hire a phone sourcer - they'd LOVE to do it for you! Know what I mean?
;)
"Believe those who are seeking the truth; doubt those who find it." ~Andrew Gide

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Permalink Reply by Maureen Sharib on January 11, 2009 at 10:20am

Indian authorities on Sunday named three business leaders to help rescue embattled outsourcing giant Satyam Computers in the wake of a massive fraud scandal that threatens to sink the company. More here.

Ya gotta love this:

Indian police personnel escort Satyam founder B. Ramalinga Raju, right, only face seen, to Chanchalguda Central Jail in Hyderabad, India, Saturday, Jan. 10, 2009. Indian police detained the chief financial officer of embattled outsourcing giant Satyam Computers on Saturday, the third executive to enter police custody in the wake of a massive fraud scandal. (AP Photo)

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Permalink Reply by Jolly Nibu on January 11, 2009 at 12:42pm

This is some thing very shocking as I personally know many of Satyam employees... and a topic which I have been following since a week when it came to public.. They do have lot of people in US at their client site (all over US) and most of them are trying for a change and it's not as easy in this economy... But, most of the companies have already started absorbing good talent (provided they are on h1).... In India, in my opinion it's difficult to get a job in this situation and one of the major Indian IT firm has already said they'll not offer a job for ex-satyamites.. I am yet to figure out if they really did make such a statement and if yes, that's not fair.. as employees have not done any wrong... Hopefully, you all will agree to this... I am hoping a MNC might overtake Satyam... and their employees will be on the safer side... there are around 50k+ employees in Satyam !!!
I believe media has started naming this as India's Enron... any comments??

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Permalink Reply by Dan Nuroo on January 11, 2009 at 6:03pm

What responsibility does PWC have for this as their auditors?

J.nibu said:

This is some thing very shocking as I personally know many of Satyam employees... and a topic which I have been following since a week when it came to public.. They do have lot of people in US at their client site (all over US) and most of them are trying for a change and it's not as easy in this economy... But, most of the companies have already started absorbing good talent (provided they are on h1).... In India, in my opinion it's difficult to get a job in this situation and one of the major Indian IT firm has already said they'll not offer a job for ex-satyamites.. I am yet to figure out if they really did make such a statement and if yes, that's not fair.. as employees have not done any wrong... Hopefully, you all will agree to this... I am hoping a MNC might overtake Satyam... and their employees will be on the safer side... there are around 50k+ employees in Satyam !!!
I believe media has started naming this as India's Enron... any comments??

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Permalink Reply by Maureen Sharib on January 13, 2009 at 8:24am

HYDERABAD, India (AP) -- Indian police on Tuesday searched the offices of PricewaterhouseCoopers, the auditors of the troubled outsourcing giant Satyam Computers, whose founder last week admitted to doctoring the company's accounts for years, an official said. More here.

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Permalink Reply by Jolly Nibu on January 13, 2009 at 11:14am

PwC being the Satyam's auditors have to answer many questions and it's very hard to imagine that being one of the world's top accounting firms, they didn't figure out such a big scam/fraud...

Dan Nuroo said:

What responsibility does PWC have for this as their auditors?

J.nibu said:
This is some thing very shocking as I personally know many of Satyam employees... and a topic which I have been following since a week when it came to public.. They do have lot of people in US at their client site (all over US) and most of them are trying for a change and it's not as easy in this economy... But, most of the companies have already started absorbing good talent (provided they are on h1).... In India, in my opinion it's difficult to get a job in this situation and one of the major Indian IT firm has already said they'll not offer a job for ex-satyamites.. I am yet to figure out if they really did make such a statement and if yes, that's not fair.. as employees have not done any wrong... Hopefully, you all will agree to this... I am hoping a MNC might overtake Satyam... and their employees will be on the safer side... there are around 50k+ employees in Satyam !!!
I believe media has started naming this as India's Enron... any comments??