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Press reaction to Satyam scandal

8 January 09 10:59 GMT

News that the head of Satyam, India's fourth-biggest software firm, has quit after revealing false accounts including some $1bn (£663m) in fictitious reserves has made the headlines and editorials across the world's press.

THE INDIAN EXPRESS

"The shocking revelations about large-scale fraud in Satyam, and the consequent free fall of its share price, mark a new, worrying, low. The Indian economy has not been isolated from the global economic crisis; but this is a development that cannot be blamed on a worldwide slowdown or on Wall Street's greed.

"This is home-grown disaster. The timing could not have been worse. The stock market is fragile, as is investor confidence. Domestic investors have been reluctant to move out of the safest of investments; and foreign investors traditionally move out of emerging markets in times of crisis anyway. This will only exacerbate that problem, just when the Indian economy needs momentum to grow in the opposite direction."

THE HINDU

"The unravelling of what is possibly the biggest scam in Indian corporate history involving the manipulation of accounts by Satyam Computer Services Chairman B Ramalinga Raju is shocking beyond belief....

"The possible motives behind Mr Raju's actions - his letter absolves the other board members as well as the top management personnel of complicity - can only be guessed at this point in time but they most certainly have to do with projecting the company in a much stronger position than what it actually was in order to boost market valuations and business prospects, keeping it in the top ranks of the IT majors. The reckless strategy to window-dress the accounts artificially boosted its key parameters but as Mr Raju has belatedly realised, a systematic falsification of accounts once begun builds up to monstrous proportions."

THE ASIAN AGE

"The fraud is gigantic. Only an immediate and thorough investigation by an independent agency can reveal the true extent of what actually happened... Though Raju says he alone is responsible for what has happened, there has obviously been collusion on the part of the company's accountants, chartered accountants, banks, and maybe even politicians, in the fraudulent financial engineering that he managed so adroitly quarter after quarter. Many heads are bound to roll, but this will surely have serious repercussions for the board members, and particularly for independent directors in various other companies in the country."

THE TIMES OF INDIA

"Sadly, ham-handedness on the part of one of India's ivy-league companies may rub off on India Inc's image as a whole. That's bad news, given the double whammy of the global economic mayhem and Mumbai terror attacks. If business-friendliness is to be projected domestically and overseas, corporate governance must top India Inc's list of priorities. Business best practices can't be reduced to a tightrope-walk on technicalities. It's a matter of keeping the faith of the larger community."

THE NEW YORK TIMES

"In the end, the scandal threatened to gobble up not just Mr Raju, who resigned, but his company, Satyam Computer Services. Far beyond Satyam, it raised fears that similar problems might lurk in other Indian companies, particularly in its vaunted outsourcing industry.

"The long-running fraud, which is being called India's Enron, also raised questions about the vigilance of regulators in India and the United States. Satyam serves as the back office for one-third of the Fortune 500 (of top US companies), including some of the largest banks, manufacturers, health care and media companies in the world - handling things like computer systems and customer service for companies that include General Electric, Nestlé, Ford Motor, Cisco and the United States government."

THE WALL STREET JOURNAL

"The huge accounting scandal at Satyam, one of India's biggest information-technology firms, could lead to an overhaul of corporate-governance standards in the country and force changes in how Indian companies do business. Although some leading Indian companies have become international powerhouses in recent years, the general standard of corporate ethics and accounting have traditionally been poor in India."

THE FINANCIAL TIMES

"The Satyam scandal is drawing comparisons with other mega-frauds in the past decade," says Brooke Masters. He compares the scandal with the 2001 collapse of Enron - with the loss of 22,000 jobs - the 2002 bankruptcy of WorldCom, then the largest corporate insolvency and the collapse of Parmalat, the Italy-based dairy company, which imploded in 2003 after the discovery of a multi-million dollar black hole in its books.

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