The Hindu Business Line : Satyam crisis jolts IT industry in Vizag

Visakhapatnam, Jan. 11 The crisis engulfing Satyam Computers is likely to have considerable impact on the nascent IT industry in Visakhapatnam, as Satyam is one of the four major companies that have set up shop here. There are a number of small IT companies here that may also feel the pinch in the aftermath of Satyam scandal, as there is a crisis of confidence.

Satyam has a city centre here, with roughly 750 employees or so, and the company has also been allotted 50 acres near Kapulauppada village, on the Vizag-Bheemli beach road, to set up the bigger operations centre. There is pressure now on the State to cancel the allotment. Several NGOs, such the Forum for Better Visakha and Praja Spandana, have urged the Government to annul the allotment.

Costs up

Mr B. Murali Manohar Rao, President of the Vizag Information Technology Association (VITA), said the “crisis in Satyam Computers could not have come at a worse time, as the industry is already suffering under the impact of economic recession. Most of the members of the VITA are small IT companies and unfortunately we will also feel the impact, as the customers abroad or in India will now look at us with suspicion.

Not only will they look at our operational efficiency, but at our financial management as well; transaction cost will certainly will go up. They will demand insurance coverage. We will be under much greater scrutiny, at least till confidence is restored in the industry. We can only hope it will be a passing phase.”

Concurring with the view, Mr Sastry Pullela, Executive Vice-President of Xinthe Technologies, said, “All along we have been promoting Visakhapatnam as an attractive IT destination, citing the example of Satyam Computers. Now that the company has suffered a heavy blow, the ripple effect will also be felt by the smaller companies here.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Satyam fraud: More than accounting skullduggery

Revamp at Satyam

Satyam fraud: Misplaced faith in self-regulation

Seeds of failure usually sown in good times

The truth beyond Satyam

New York and Hyderabad, a tale of two cities

Satyam crisis jolts IT industry in Vizag

Put checks and balances in place: Deepak Parekh

‘Employee confidence, biz continuity are the key priorities’

Minutes of controversial Dec 16 Satyam board meet

Satyam – In undistinguished company; but the debris needs clearing

In custody

European IT majors feel the heat of Satyam fiasco

Centre’s action a first of its kind for listed entity, say experts

Satyam CFO remanded to judicial custody

Parekh, Karnik, Achutan appointed to Satyam board

New Satyam board will help restore investor faith: India Inc