On Dec. 30, when Satyam Computer Services Ltd. seemed merely troubled, we wondered whether strategic and private equity buyers
would vie to put money into the Indian outsourcing and computer services company.
Now that chairman B. Ramalinga Raju (pictured) has admitted that the company's balance sheet is a fabrication, it doesn't look like there will be any vying for a while.
There are implications not just for potential investors in Satyam but also for potential investors in anything else in India, and maybe beyond. As the headline in the Economic Times put it,
"Satyam fraud clouds corporate governance of India, Inc."Non-Indian corporate dealmakers, already skeptical about the books they're given to review for smaller Indian investments, are now watching the meltdown of a company that was reportedly audited by PriceWaterhouseCoopers, banked by BNP Paribas SA and HSBC Holdings plc, and had its depositary receipts listed on the New York Stock Exchange. (Trading is now suspended.)
It's not that there's any shortage of scandal or just appallingly bad judgment in Western finance these days. But at a time when those with capital to commit have become hyper-sensitive to risk, this can't be good for foreign direct investment in India, or indeed in other emerging economies. -
Kenneth Klee
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Juergen Lasowski
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It’s a big blow to the Indian economy. Sentiments of all investors particularly FIIs is dampened. It will have dominos effect and the maket may collapse due to selling from all quarters, particularly FIIs. Its time that the powers-to-be plung into action and to take damage control before it has cascding effect. Some one should come forward to take care of the 50,000+ innocent employees and their families.