Satyam employee commits suicide fearing job loss

 Apparently fearing that he may lose his job, a 23-year-old employee of scam-ravaged Satyam Computers allegedly committed suicide here, police said. Vishwa Venkatesan, hailing from Salem, yesterday consumed poison.

He was referred to the General Hospital where he died, they said. Fear of losing his job drove him to take the extreme step, they said.

Venkatesan had earlier also made similar attempts after the scam broke out early this month but was saved due to the timely action, police added.

Govt, SEBI seek access to Raju

The government will move court in day or two to seek permission to interrogate Satyam's former chairman B. Ramalinga Raju, now lodged in Hyderabad's Chanchalguda Jail, as lack of access to him appears to have slowed down investigations into the country's biggest corporate fraud. "We'll be moving court, most likely by tomorrow, to seek permission to interrogate Raju," corporate affairs minister P.C. Gupta told Hindustan Times on Thursday, shortly after nominating three new members on the board of Satyam.

Separately, capital markets regulator Securities and Exchange Board of India (SEBI) too is seeking permission to interrogate Raju. While the ministry of company affairs will question Raju on violations of the Companies Act, SEBI's probe will focus on insider trading and market manipulation.

"We're in touch with each other and working together on this," said a senior SEBI official. On Wednesday, SEBI's lawyer Pradyumana Kumar Reddy said Raju's judicial custody was delaying the probe.

"Whatever is required by the company will be done," Gupta said while announcing the new directors. "But no financial assistance has been sought by the management so far.

" The three new directors are Tarun Das, chief mentor of industry body Confederation of Indian Industry; T.N. Manoharan, former president of the Institute of Chartered Accountants of India; Suryakant Balkrishna Mainak of Life Insurance Corporation of India, which has a stake of over 4 per cent in Satyam. They will join HDFC chairman Deepak Parekh, IT industry veteran Kiran Karnik and legal expert C. Achutan to make a six-member board, which will meet on Saturday.

Raju has been taken into judicial custody till January 23. The government has handed over the probe into the Rs 7,000 crore scam to Serious Fraud Investigation Office, a multidisciplinary agency empowered to investigate major economic offences that have substantial regulatory and public interest.

Satyam's loss could be TCS' gain

One company’s misfortune might well be another’s opportunity. It is widely believed that many scam-hit IT firm Satyam Computer’s clients will migrate to competitors such as Infosys, Tata Consultancy Services (TCS) and Wipro, over a period of time.

According to a recent Edelweiss Capital report, TCS is likely to garner maximum revenue from Satyam Computer’s pie as it has the highest client overlap with the latter. Infosys, it says, would perhaps gain less than Wipro, given its lower client overlap and greater selectivity.

Up to 40% of Satyam’ revenue pie can get redistributed among other players (i.e. up to $1 billion) on an annualised run-rate basis by the end of the quarter of the current fiscal, the report says.

“Given the gradual exit patterns, this may be effectively $500-600 million of actual outflow through the year (as not all of this gets out in the beginning itself, nor do all contracts exit upfront),” says the report.

The broking house is of the view that all large IT services majors would not gain to the same extent as a lot depends on the pricing discipline as well as the overlap of their strengths and clients with those of Satyam. “It feels that Infosys may prefer to stay away from those contracts that it believes will dilute the quality of revenues,” the report said.

There are very few clients who have exclusive vendor-relations with Indian IT companies. Of Satyam’s revenues coming up for re-negotiation from clients having multi-vendor relationships (that is having project tie-ups with other Indian firms), there is greater probability of 50% of such contracts going the other vendors’ way as switching costs are lower and comfort is higher, the report adds.

For example, Citibank and GM are clients of both Wipro and Satyam. It is likely that these relationships will significantly shift in favour of Wipro. About 25% of Satyam’s exclusive clients (one vendor client) are likely to shift to newer vendors, says the report. Among top Indian IT vendors, TCS is well-placed to garner maximum revenue pie (nearly $115 million in FY10, or 2% of FY09 revenues).


Wipro and Infosys follow behind with around $95 million and $80 million, respectively, (also within 2-2.5% of their FY09 IT-services revenues), notes the report. Cognizant, according to the Edelweiss report, could benefit relatively less given its limited strength in Satyam’s mainstay — ERP, manufacturing and presence in emerging markets.

HCL may not be a beneficiary as its entrenchment in ERP is relatively low, it adds. Besides, clients are more responsive to corporate governance issues putting Infosys, TCS and Wipro at relative advantage among Indian players, says the domestic broking house.

Outcome of the Board Meeting

A very good evening to all of you.

We have concluded the preliminary discussions of the first meeting of the Board constituted by the Central Government, today.

The top priority of the board is to restore confidence of the customers, employees, suppliers and investors by ensuring business continuity.

An issue of this enormity would need careful consideration and extended meaningful reviews, before it is resolved. We will, however, attempt to give you an overview. It is important to recognize though, that the Board may not be in a position to communicate the details on many issues, at this juncture. We will try and answers some of the questions that may be uppermost in all our minds, today.

Left to Right: C Achuthan, Deepak S Parekh, Kiran Karnik

The government is going to appoint a few more Board members soon, immediately after which the full board will decide the appointment of the Chairman.

Given the enormity of the issue and the urgent attention required, the Board will have to meet frequently for the next few months.

We are in the process of appointing an independent accounting firm within the next 48 hours to restate the financial and announce the Q3 results.

In the past few hours that we have been here, we have been impressed by the commitment of the officers that we have met. Many Satyamites have reached out reaffirming their commitment to the company and their desire to see Satyam reach greater heights. The associates are definitely of high quality and they have shown tremendous resilience and commitment, amidst all the adversity that they have been subjected to. We are told that they have united and rallied to get Satyam out of this crisis. We feel assured that they will show the same determination to deliver high quality work as per SLAs, and help restore the glory for this organization.

We are also impressed with all the marquee customers that Satyam has, which reads like the who is who of the global corporations. We like to assure Satyam’s customers that our immediate priority is to ensure sustainability of services with minimal disruption. The government is keen to do everything possible to quickly get the organization on its feet and conduct business as usual.

Working capital issues require immediate attention and we will work with the team to tide over this situation.

Thank you for joining us today. We will convene soon and update you on further developments