By Staff Writer

Satyam a misnomer, an ignominy for brand India - a lot has been said and written in the past few days when India's fourth largest software and services company washed its dirty linen in public. The red herring case of Satyam has seemed to attract clouds in the outsourcing horizon. According to one school of thought, this episode will affect India's credibility in the global arena and it could become difficult to raise foreign investments in future. Also, it has caused a lot of collateral damage in the sense that now other Indian companies will also be looked at with an eye of suspicion. They feel India has lost its global image. Ad man Suhel Seth comments fiercely "With what face do you talk about cutting edge corporate governance in India" and calls Ramalingam Raju the "poster boy of criminality" while Infosys Co-Chairman, Nandan Nilekani calls it a "deplorable behaviour" and "setback to what we have been trying to accomplish."

Experts on the Horn's of Dilemma

Experts fail to understand what has gone wrong and how such a mammoth scam went by unnoticed. If we ignore how casually and seamlessly the accounts were fudged for years and how easily the profits were cooked up, and shift our focus to the auditors, isn't it their incompetence in not being able to detect such a big fraud or is it that their mouths were gagged with money? Satyam had a cash balance of over $1 billion that was 94% bogus so how could the auditors (PWC) miss such an enormous amount of money without even batting an eyelid.

Positive Fallouts

Sometimes lessons have to be learnt the hard way, the Satyam scam has rung a warning bell for corporates and now they cannot get away with this kind of fraudulent tomfoolery. The devil is dead but has left behind some silver dust. Laws pertaining to corporate governance will become strict and corporates will be scrutinized more tightly now. Many outsourcing industry sources debate that the Indian outsourcing industry will gain to a great extent through this stringent regulation.

Though it might be difficult for Satyam to struggle back on its limbs after this mighty downfall, other companies remain largely unaffected. India's IT trade organization, NASSCOM calls it a one off incident. According to a NASSCOM spokesperson "This is a standalone case of a failure of corporate governance, and it is critical that it will be viewed in this light. This is not in any manner a reflection on the industry or corporate India."

The Satyam saga is expected to set off better and new auditing set of laws in India. Customers will now demand more credibility and investigate their service providers due diligence measures. Nandan Nileknani feels that after this incident customers "will not operate with a white brush". Anand Mahindra, the Managing Director of Mahindra & Mahindra stated that "This development has resulted in incalculable and unjustifiable damage to Brand India and Brand IT in particular". However, he also said that the "whole of Indian industry should not be tarred with the same brush". Customers will become more cautious but it will certainly be for the good of the brand "India".

Suppositions are also being made about what will happen to the Satyam's current clientele. According to Forrester Research, it could trigger Satyam's clients to re-assess their deals and these accounts could probably pass over to other offshore suppliers in India.

With the global economic slowdown, we are not living in an insulated environment and frauds like this can happen anywhere. However, this does not make the others in the same environment, shareholders of the crime. As Infosys HR Director, Mohandas Pai rightly says, "The Satyam fraud is an aberration... I don't think it would shake clients' faith in other Indian IT companies." So let's think of this episode, as just a footnote in the story of growth of the brand called India, learn lessons from it and move on.

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