PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Global Reach
A major casualty of the current market environment—and of its own internal governance—was
Satyam Computer Services. In January 2009, Satyam chairman B. Ramalingu Raju admitted to
accounting fraud, inflating assets and understating liabilities on Satyam’s balance sheet. This followed
a World Bank announcement declaring Satyam ineligible to bid on procurement contracts
for eight years, due to alleged payment of kickbacks and incomplete billing documentation. In
April 2009, Tech Mahindra offered the winning bid to acquire 51% of Satyam.
The industry hopes for a 32% growth rate in 2009-10, thanks in part to a one-year extension of a
tax holiday on software exports that had been scheduled to expire in March 2009. In the meantime,
falling rupee-denominated costs can be expected to improve operating margins. NASSCOM
projects that Indian IT companies could reap as much as $47 billion in contracts from global
enterprises in 2009, based on the need of companies hard hit by recession to cut IT budgets
through outsourcing.
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