Indian outsourcing scandal rocks Australian organisations

The fallout from the financial fraud scandal from outsourcing giant Satyam has quickly spread to Australia, engulfing the company’s clients and a university where Satyam was set to help build a $75 million computer lab.

Satyam

The fallout from the financial fraud scandal from outsourcing giant Satyam has quickly spread to Australia, engulfing the company’s clients and a university where Satyam was set to help build a $75 million computer lab.

Satyam’s global operations were thrown into chaos after the company’s chairman, Ramalinga Raju, admitted that $1.4 billion in cash and bank loans the company listed as assets on its balance sheet last September did not actually exist.

Satyam Australia reportedly has revenues of around $200 million a year and employs around 1700 people in offices in Melbourne, Sydney and Brisbane.

Its big-name Australian clients include NAB, Telstra and Qantas. All three companies say they are watching the situation closely and have put contingency plans in place.

Qantas said in a statement that it had five years remaining on a seven-year contract for IT maintenance and support with Satyam.

“At this stage Qantas assesses any risks to business as manageable,” it said.

Down in the Victorian city of Geelong, Deakin University’s acting vice-chancellor John Rosenberg is watching the Saytam situation nervously.

Last year the university, the Victorian Government and Satyam announced plans to build a state-of-the-art computer laboratory at the university’s campus in Geelong. The laboratory was expected to create 2000 jobs.

“At this stage we don’t know what is happening and we are still hoping that it can go ahead,” Rosenberg told the Geelong Advertiser.

The State Government is in talks with Satyam about the project and its on-going operations in Victoria.

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