Hrcases’s

February 2, 2009

‘Scam-hit Satyam unlikely to exist’

Filed under: Fiasco, Satyam, Scams — Tags: , , , — hrcases @ 12:48 pm

Troubles keep mounting for Satyam Computer Services. Some of its top clients namely, Citigroup, Merrill Lynch, Novartis and GlaxoSmithKline are in talks to move their business from the Hyderabad based company to other Indian IT firms.

In the meantime, the number of potential suitors to acquire the beleaguered firm is growing by the day. As many as six companies from the manufacturing, information technology and private equity space have shown interest to buy out the firm. The newly constituted board has narrowed down on a list of three possible candidates for a Chief Executive Officer (CEO) and Chief Financial Officer (CFO), is also mulling providing legal immunity to the new management leadership team from being liable to the previous records of the company.

According to a study by research firm Gartner, the scam-stricken Satyam Computers is unlikely to exist in its current form. It is expected to discontinue some of its businesses, service lines or cease to exist in certain geographies by 2010. The study indicated that even the name Satyam may not exist for long. Satyam’s ability to sign on new clients during 2009 has significantly diminished, says the study. “In addition, it will be challenged to invest in client engagements, staff developments or R&D – all critical elements for IT services,” said Gartner’s Vice President for Research, Frances Karamouzis. For the study, Gartner interviewed representatives of over 30 top Fortune 500 clients of Satyam, 20 top non-Satyam clients, the board of Satyam and CEOs of six tier-I Indian IT firms including TCS, Wipro, Infosys Technologies, Cognizant and HCL.

Gartner believes that Satyam’s ability to regain the trust and credibility has diminished. Satyam has 690 global customers, of which 185 are Fortune 500 companies. A significant number of these clients have already sent some kind of inquiry to other vendors in India. Source: The Times of India group.

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