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Our Blogs The BeerFiles Has Satyam signaled end of Indian tech miracle?
Our Blogs The BeerFiles Has Satyam signaled end of Indian tech miracle? | Has Satyam signaled end of Indian tech miracle? |
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| by Stan Beer | |
| Sunday, 11 January 2009 | |
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With its founding boss now in custody, there is little doubt that Satyam will cease to exist in its present form. The prevailing view is that it will be broken up and sold off to other Indian service providers. The company has many valuable contracts from first tier customers on its books. Those customers, however, will now face questions from their shareholders about the risks associated with the offshore model. Satyam was a first tier offshore outsourcer - one of the big four on the sub-continent. If this thing could happen to such a big player in the nascent Indian global high tech corporate world, what about the other three even bigger players? What about the burgeoning number of smaller players in India? Is the Satyam affair just a one-off corporate incident or is it an endemic problem, symptomatic of an immature and lax national corporate regulatory culture? In the current climate of a global economic downturn, the boards of large companies may have a hard time convincing shareholders and employees alike that the latter is not the case. In most cases, one rogue corporate activity does not a disaster make. If that were the case, the home of corporate scandals, the US, with its Enrons, Worldcoms and sub-prime mortgage fiascos, would have been out of business long ago. However, India is not the US. It is a newly emerged economy - an economic miracle - fuelled by the economic activity created by companies in the exact mold of Satyam. If the mold is found to be flawed and cracking, then so too may be the economic miracle. CONTINUED Page 2 |
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