Satyam corporate fraud shocks India

Hyderabad/Mumbai, Jan 9 (ANI): The recent corporate fraud of inflated profits of Satyam Computer, the country's fourth-largest software company, has shocked investors in India.

Newspapers across the country on Friday carried the headlines screaming for the authorities to take action against the corporate fraud in order to reinstate the investor confidence.

Satyam employees shuffled into its Hyderabad office refusing to comment on anything. But employees of the software companies in Hyderabad said that the truth needed to come out soon so that air could be cleared.

Many said that investors as well as employees needed to get back the confidence that the Satyam corporate fraud was just an aberration and the moral health along with the financial health of India Inc was good.

"If tough actions are taken immediately, and truth is brought out immediately, we can at least get out that as soon as possible. That will help us, everybody, including customers," said Kumar, an employee of a software firm.

The investigators are expected to swoop down on the company's headquarters to search for clues on how the fraud could have been hidden for so long.

It may also increase investor nervousness about weak corporate governance and oversight in emerging markets, which are still reeling from the global financial crisis.

Amit Whagware from Mumbai who had invested in Satyam and other IT companies almost a year back said that this fraud was a big blow to investors, especially in times of global recessionary trends.

"It was a big shock to IT industry as well as to all the investors who were relying on such companies," said Whagware.

Meanwhile, official sources have indicated that steps would be taken to strengthen laws to prevent corporate fraud after the scandal that sent the company's shares plunging nearly 80 per cent. (ANI)