Government happy with Satyam deal, gets pat on back

After Satyam founder Ramalinga Raju admitted on January 7, to carrying out India's biggest corporate fraud by fudging Satyam's account books to the tune of $1.5 billion, the Indian government was left red-faced as it was criticized for not having adequate regulatory measures in place to protect the interest of shareholders. However, the government made amends by quickly stepping in and arresting the accused, sacking Satyam's board f directors and replacing it with handpicked people, and pushing the company through a quick sale, in order to prevent losses in the country's $71 billion outsourcing industry.

On Monday, after Tech Mahindra's name as the winning bidder was announced, India's Prime Minister Manmohan Singh, who had once called the fraud a "blot" on India's corporate governance, expressed satisfaction at the manner in which the whole episode was handled over the past three months, saying, "I am confident that our regulatory system has the resilience and strength to ensure that no such Satyams ever take place."

The government also received a pat on the back from India Inc."The government has acted on time. (For the first time) within 100 days of the announcement of the fraud, a permanent solution has been carved out," said Som Mittal, president of the National Association of Software and Service Companies or NASSCOM, the consortium that serves as the apex body of the Indian IT software and BPO industry.

"The government did an excellent job to ensure transparency in the bidding process," said Sajjan Jindal, president of Associated Chambers of Commerce and Industry of India (ASSOCHAM).Agrees S. Gopalakrishnan, CEO, Infosys Technologies. "It is commendable that the government-appointed board at Satyam has been able to bring a closure to the uncertainty surrounding Satyam's future. The government has addressed the issue quickly and responsibly. Overall, it is a good thing that the issue is put behind us," Gopalakrishnan said.