New Delhi, Jan 30 (Inditop) The $1.4-billion Satyam fraud has shaken the collective conscience of Indians and the government will ensure it does not impact its $64-billion software industry, Minister of State for IT and Communications Jyotiraditya Scindia has said.
“A fraud of this proportion being committed by the very people whose nature we thought was exemplary until this incident happened is something that shakes our confidence and trust,” the young minister said, referring to the fraud perpetrated by the founders of India’s fourth biggest software services company.
“It is a shocking incident that not only affects the government, that not only affects the corporate world but also affects the conscience of all us Indians,” Scindia told Inditop in an interview at his office at the Electronics Niketan here.
“There are millions of investors in the company, thousands of customers, 53,000 employees – as a promoter, you are the custodian for all of these. Therefore, it is the trust of all these that has been belied,” he said.
“As far as India’s brand equity is concerned, I think it’s still very strong,” added the 38-year-old, second-term MP who represents Guna in Madhya Pradesh in the Lok Sabha.
The Hyderabad-based Satyam, seen as a poster for India’s phenomenal growth in the IT services sector in the last decade, has been in the dock ever since its founder and former chairman, B. Ramalinga Raju, admitted to financial irregularities worth Rs.70 billion/Rs.7000 crores over the past several years.
Prime Minister Manmohan Singh had called the scam that hit global headlines a “slur” on India’s corporate image and assured that no stone will be left unturned to get to the bottom of the whole scandal and punish the guilty.
Scindia, who is educated at Harvard and Stanford, maintained that Indians so far had heard about incidents like the Satyam Computer Services scam only in the West, like those involving companies like the erstwhile Enron and Tyco.
“Since this is the first time it has happened in India, it is important for us to tighten our corporate governance norms,” he said, adding the corporate affairs ministry was doing everything possible to unearth the full scale of the fraud.
“But our IT industry is very strong and resilient – about $64 billion in terms of the industry size today – and has grown exponentially. We will be more than willing to do anything to extend the confidence of investors and customers.”
The minister recounted that a number of steps had already been taken to bring the guilty to book and put the company back on rails such as a probe by the Serious Fraud Investigating Office and the reconstitution of the Satyam board.
“Investigation is in process; so let’s wait for the results.”
Scindia said his ministry was in touch with both the corporate affairs ministry and industry associations like the National Association of Software and Service Companies (Nasscom) to contain the fallout, if any, of the scam on the Indian IT sector.
“That’s pretty much in the pipeline,” he said, adding: “We’re very serious about this and we’ll look at bringing into place much tighter regulations and norms in the near future.”
