Indian Government Yanks Lifeline for Scandalized IT Giant

Indian officials are ruling out a government bailout for one of the country's largest information technology enterprises, Satyam Computer.  This comes following speculation Satyam was under consideration to receive a lifeline from the government after its founder - who admitted to conducting $1 billion-plus fraud - was arrested.

Government officials say they will try to preserve the jobs of tens of thousands of Satyam employees, but are not looking to bail out the high-tech company.

Minister of State for Industry Ashwani Kumar says India's government is not going to directly or indirectly subsidize what he calls "wrongdoing and fraud in Satyam."

Earlier, some top government officials had said a massive cash bailout was under consideration.

Satyam - one of India's largest software and outsourcing entities - is in a deep crisis, after founder B. Ramalinga Raju revealed he had falsified company accounts to the tune of nearly $1.5 billion.

Despite the depth of the financial debacle, Indian minister of state for corporate affairs, Prem Chand Gupta, tells reporters it is premature to talk of a government rescue package for the troubled company and that Satyam has not requested such a bailout.            

"The company may not need that.  They have sufficient receivables.  Their clients are all triple-A class clients.  And, then, now it is for the new board [of directors] to take a view," said Gupta.

The government appointed a board of eminent outsiders, after ousting the corporation's directors.

Analysts say the situation at Satyam is so confusing it is difficult to know just how many employees and clients the company has, let alone ascertain its financial standing.

Satyam has appointed two new auditing firms to examine the extent of the fraud and restate financial results for the publicly-traded company.  Once that happens, Satyam may be able to approach equity partners or banks for a loan.

Satyam had a valuation of $7 billion, six months ago but its shares have plunged about 90 percent since the scandal came to light, last week.

Authorities say Satyam founder Raju has admitted falsely inflating profits for years. Raju, his brother and Satyam's former chief financial officer have been jailed and face criminal charges.

Satyam's clients include many of the world's largest corporations.

Steve Herman

A veteran journalist, Steve Herman is VOA's Southeast Asia Bureau Chief and Correspondent, based in Bangkok.

This forum has been closed.
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
House Republicans in Chaos as Speaker Favorite Withdrawsi
Jim Malone
October 09, 2015 12:32 AM
The Republican widely expected to become the next speaker of the House of Representatives shocked his colleagues Thursday by announcing he was withdrawing his candidacy. The decision by Majority Leader Kevin McCarthy means the race to succeed retiring Speaker John Boehner is now wide open. VOA National Correspondent Jim Malone reports.

Video House Republicans in Chaos as Speaker Favorite Withdraws

The Republican widely expected to become the next speaker of the House of Representatives shocked his colleagues Thursday by announcing he was withdrawing his candidacy. The decision by Majority Leader Kevin McCarthy means the race to succeed retiring Speaker John Boehner is now wide open. VOA National Correspondent Jim Malone reports.

Video German, US Officials Investigate Volkswagen

German officials have taken steps to restore some of the reputation their car industry has lost after a recent Volkswagen diesel emissions scandal. Authorities have searched Volkswagen headquarters and other locations in an effort to identify the culprits in the creation of software that helps cheat on emission tests. Meanwhile, a group of lawmakers in Washington held a hearing to get to the bottom of the cheating strategy that was first discovered in the United States. Zlatica Hoke reports.

Video Why Are Gun Laws So Hard for Congress to Tackle?

Since taking office, President Barack Obama has spoken out or issued statements about 15 mass shootings. The most recent shooting, in which 10 people were killed at a community college, sparked outrage over the nation's gun laws. But changing those laws isn't as easy as many think. VOA's Carolyn Presutti reports.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

VOA Blogs