Satyam: will we ever know the whole truth?

Sam Varghese
Monday, 09 February 2009 13:00

IT Industry - Market

Outside India, there is an impression that the country's IT potential was fully exploited only after the outsourcing industry boom. But this is far from being a fact.

During the late '70s and '80s, there was a much better educated class of technology person coming out of Indian colleges, particularly the five Indian Institutes of Technology which are Government-run. A large percentage of this category are now holding mid-range positions in companies around the globe, particularly in the US.

Some have now gone back to India to work for their Western employers, in units set up in India - they have the advantage of home-town experience and this has helped obtain their postings.

During the 90s, a lesser educated brand of worker was churned out, simply because the demand was for drudge work - the so-called end-to-end solution creators. One needed quantity, not quality. The average worker could program in three or four languages, provided the specifications were provided.

But even these people have their price. And they want some stability. Satyam employees right now fear for their jobs - and given the stigma attached to being part of a company where fraud was rampant, they may well seek to move on before it becomes too difficult to do so. India is still, by and large, a very conservative country.

Indian sources say that while the fraud only came to light on January 7, Satyam had been trying to obtain no-dues certificates from clients in December - asking companies which owed them money to issue a no-dues certificate and promising that any money pending would be paid.

The need for the no-dues certificate? Apparently, Satyam sought to explain it away by saying it was an auditors' requirement.

Exactly how many companies obliged - because Satyam was known to be a good client, one which paid its bills on time and without much fuss - is unknown.

But this and many other facts are unlikely to come to light, even if the CBI is asked to investigate. The Indian government wants to save face over the issue and prevent the reputation of Satyam tarnishing any of the other outsourcing outfits - which are a major source of foreign currency. Anyone expecting a full confession is bound to be disappointed.