Foreign govts alarmed at Satyam fiasco

Foreign governments that had engaged the services of the scam-ridden Satyam Computer Services are deeply worried about how the existing contracts will be serviced, according to a central government minister who did not wish to be identified.

Envoys from at least two countries that had outsourced IT work to Satyam have contacted the Indian government over concerns about the health of the company. “We have reassured them that there will be no contractual defaults,” said the minister.

Ever since Satyam founder and former chairman B Ramalinga Raju disclosed that the bank balances reported by the company were fictitious, questions have been raised on how long the company will be able to run without cash. While some of its clients have said they will stay, there is widespread speculation that some of them may soon shift to other IT vendors.

In Singapore, Satyam handles a large volume of government-related IT business.

Australia’s largest bank, the privately-held National Australian Bank, is listed as a Satyam client. However, an Australian High Commission spokesperson said on Thursday High Commissioner John McCarthy had not been in touch with India over this issue. The spokesperson added the Australian government was not aware of any of its entities being Satyam clients.

In Ireland, the Further Education Training and Awards Council (FETAC), a statutory body for adult and continuing education funded by the government, had signed up Satyam in 2007 for a contract worth 1.273 million euros to create the new FETAC Business System.

In the United Arab Emirates, Satyam was contracted to provide a financial management solution for the Emirates Bank.

In Oman, it was servicing Khimji Ramdas LLC, a leading business house which represents over 100 global brands in a wide spectrum of business activities including trading, distribution, retailing and manufacturing.