Date:08/01/2009 URL: http://www.thehindu.com/2009/01/08/stories/2009010859931500.htm

Business

Uncertainty looms large over SCSL’s future

Shanthi Kannan

Widespread talk of takeover is continuously doing the rounds

CHENNAI: It is an irony that Satyam Computer Services Ltd. (SCSL), which got the “Golden Peacock” award from the World Council of Corporate Governance, finds itself in such a mess because of the financial shenanigans committed by the top management. A number of events are likely to unfold in the next few days. The board of the company is bound to be recast. The Satyam affair will come under the scanners of regulatory authorities like the Securities and Exchange Board of India (SEBI), the Company Law Board and also the Securities and Exchange Commission (SEC). The role of auditors and independent directors will also come under scrutiny.

Unsung stakeholders

Even as the ramifications of the Satyam episode unfold, a key yet an unsung stakeholders — the employees — will be silently reviewing their future. According to inside information, the happenings in the company may not have immediate negative fall-out on the over 50,000 employees. As most of the clients of Satyam are U.S.-based, they can not shift their businesses out of Satyam with retrospective effect, as it involved various critical mission processes. However, most of them could re-think on the renewal of their businesses with Satyam.

But there is a looming uncertainty with the widespread talk of takeover continuously doing the rounds. In the face of uncertain future, worried employees may look for quicker exit routes. The ugly happenings, it is argued, will trigger exodus of good professionals at the available opportunity. This is going to be the biggest challenge facing the interim management of Satyam. Information technology services are highly people-dependent. A large-scale brain drain could hurt the company irreparably. This year, the company had given offer letters to nearly 3,000 students from various colleges across the country. Will this commitment be honoured? This is a big question? Satyam is also running three other non-profit organisations — Satyam Learning Centre, Emerging Management Reasoning Institute and Satyam Foundation — with a staff strength of over 500 employees. Now with the new management and cash crunch, what will happen to these companies and the staff?