Indian officials are promising to strengthen laws to prevent corporate fraud in the wake of a massive corporate scandal in the country's famous information technology industry. The revelation that one of the country's biggest technology outsourcing firms had inflated its profits and assets for years has shaken corporate India as well as foreign investors.
As the scale of the biggest corporate fraud in India becomes clear, top government officials have moved quickly to say they will do all they can to ensure there is no repetition.
This week, the chairman of Satyam Computer Services - the country's fourth largest Information Technology company - rocked corporate India by disclosing that over 90 percent of the $1.1 billion listed as cash on the company's books was fictitious. Satyam specializes in business software and back office services, and its clients include some of the world's biggest banks and manufacturers.
Regulatory authorities in India have begun searching for clues as questions are raised about how the fraud could have been hidden for so long.
Corporate Affairs Minister Prem Chand Gupta is promising stringent action against those found guilty.
"It would be the strictest possible action against the erring company … We are in fact more concerned about the investors, the stakeholders, the country's image," said Gupta.
A new management in Satyam is trying to salvage the situation. The company's interim chairman, Ram Mynampati, says they have reached out to their top 100 customers worldwide.
"The next step is to ensure that business continuity remains undisturbed … These steps include reaching out to our customers to assure them that business support deliverables will continue as usual, practicing complete transparency in all that we do," said Mynampati.
But analysts say it is unclear how the company will survive the scandal, dubbed as "India's Enron".
However the jury is out on how the scandal will impact foreign investors. Some analysts fear that global businesses will be cautious about investing in India as the country's corporate governance and accounting standards come under scrutiny.
Others say those worries will be short-lived. They say investors will continue to pump money into one of the world's fastest growing economies, although they will pay closer attention to the books of companies they are investing in.
On its part, India's information technology is reassuring customers that Satyam represents a "stand-alone case." The $50 billion IT industry has grown massively over the last two decades, and several Indian technology companies are listed on the New York Stock exchange. The New York Stock Exchange has halted trading in Satyam's shares.