Can Software gaint Satyam can achieve its previous position back
By vasavi20
@vasavi20 (293)
India
1 response
@lexus54 (3572)
• Singapore
26 Feb 09
I read in the newspapers in January about the shock discovery that Satyam's founder Ramalinga Raju was involved in a $1bn accounting fraud, tinkering with the actual turnover and profit figures for the company over the years. It was shocking that such a thing was happening to this IT outsource giant. Satyam as you know is one of India's largest IT outsourcer, with about 50K staff worldwide. Because of this fraud, no one really knows the real financial situation of this company, how much cash it has left, whether it can pay its staff, etc. I also read reports that there was a lot of bad press for the company, with rumors that Satyam's partners might be pulling out from partnerships and alliances with them.
Until a proper plan is hatched to revive this company, I think currently it is still in dire straits with its confidence badly jolted and share price collapsed. I feel firstly Satyam needs to put some stability and trust back into its management, and I read that Satyam had already replaced the CEO, so that's probably a right first move. I think who helms the company is critical as the company tries to move into a revival phase. Probably what it needs also is to secure good funding for the company, perhaps in the form of a bailout from banks or even the Indian government. The auditors and investigators need to sort out the books, to ascertain what the actual financial status of the company is. Meanwhile, it has to do a lot of PR to reassure its customers, partners and staff about its business viability and its ability to pay its staff to keep their services going. It is also possible that a longer-term option may be to sell the company.
All said, it is probably hard for anyone to guess how all these will pan out for Satyam. Whether it can revive its fortunes and retain its previous reputation is uncertain at this stage. My guess is that it will probably not be like its heydays before this fraud was uncovered. Of course I hope it will, but that will have to take time...probably lots of it, because any company rocked by a major fraud like this will take an extensive time to recover, and right now, we don't even know if it will even recover. Only time will tell.

