Shoring Up Satyam: Outsourcer Gets Boost

By Laton McCartney

Satyam Computer Services, the severely troubled Hyderabad, India-based outsourcer took several steps recently to help ensure its continued viability.

After Satyam Chairman Ramalinga Raju revealed that the company had massively inflated earnings and falsified accounts, Satyam began the process of replacing the senior management team, ousted its old accounting firm, Price Waterhouse, and appointed Goldman Sachs and Avendus as investment bankers in hopes of finding new investors.

"The top priority of the board is to restore confidence of the customers, employees, suppliers and investors by ensuring business continuity", Satyam board member Deepak Parekjh said at a recent press conference.

Satyam also announced that the board had appointed Boston Consulting Group (BCG) as management advisors. Three senior BCG representatives will work closely with Satyam's board and leadership team to spearhead the organization's revival and at no cost to the client. "BCG has been appointed by the board of Satyam to provide management advice to the company," James Abraham, a New Delhi-based BCG senior partner told CIOZone. "We are not charging any direct fees as we do not want to be a cash burden on Satyam. We, along with the board members and several other advisers, see this as work in India's national interest."

The best news, however, is that since the scandal was made public in early January, the company has signed 15 contracts. "Some are new and some are extensions," says Satyam spokesman Jim Swords. Most of the deals are in the $25 to $100 million range and include new US clients in the insurance and pharma sectors and a new European chemical client, Satyam claims.

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