aSatyam wnat does it mean to all of us

ASatyam

Satyam debacle is 26/11 of Corporate India. People thought things like Enron, Worldcom happen only in the west and we are away from scams in corporate world of this magnitude. Some thought such large case frauds do take place only in Government sector and entrepreneurial corporate India is insulated and scams are of smaller magnitude. All these theories have been proved wrong by Mr Raju.

There are many aspects to Satyam story.

Customers :

Many of us have toiled hard to bring global outsourcing clients to India and Brand India was getting stronger day by day. Satyam debacle is a slap on India's IT image. Our Audit system, Corporate Governance, Banking system, promises made by the board, role of Independent directors is all under scanner now. It will take lot of efforts to rebuild India's IT image in the west. Induction of 3 wise men on the board is a welcome step. They will take time to rebuild But customers are bound to be cautious now. Future business contracts will have stricter due diligence, strong exit clauses, credential cheques and third party audits. Bad news always spreads faster than the good news. We all are witnessing thisn currently.

AP Government as an IT destination (Cyberabad to Satyamabad)

Andhra Pradesh was considered a rising IT/ITES destination and Mr Ramlingam Raju was like a Brand Ambassador of Cyberbad. Brand AP will definitely be hit hard and investors wishing to invest in AP will now be more cautious.

Suppliers/Service Providers

No Company of this size and magnitude can do business without many vendors, service providers and sub contractors. All of them are now worried about their business prospects and receivables. Many are dependent on Satyam and some are doing business only on word of mouth and they are not sure if they will be paid. All of them cant be absorbed elsewhere since overall mood in the corporate India is that of gloom and cost cutting.

Ordinary Shareholders

Everybody was louding Satyam and its results year after year and based on available data were quoting Satyam as a safe investment bet. many got handsome returns in the past. Many ordinary shareholders have lost huge money in the last few days. Who knows when will the stock recover ? Institutional investors have different agony.

Employees

Working with Satyam was a Dream Job once. Now the party is over. Employees on bench, freshers, those on offer are the ones who will be axed or affected. You dont need an astrologer to tell this. Repositioning at the last minute will take time. Experienced staffers having ESOP shares with Lock In are now looking at the vapour of their share dreams. Suddenly Cost to Company (CTC) package of Satyam staffers is evaporated. Pay cuts, job loss, relocations are in the offing for many staffers.

All in all everything looks like a Bollywood pot boiler. An Imaginary tale happening on celluloid is now suddenly Real. It will take time to heal the wounds.