Satyam fraud makes Australian heavy weights rethink their stratagies.

Some of the business giants in Australia seemed bothered after the resignation of Mr.Ramalinga Raju, Chairman, Satyam Computer Services. The chief resigned on Wednesday, 7th January, 2009, saying that nearly $1.44 billion which mounts 94% of the company’s cash and balances, are non-existent. As a result, about 80% of company’s shares have plunged with zero gains. Local heavy weights in Australia, Qantas Airways Ltd, Telstra Corp and National Australia Bank Ltd (NAB) have stated outsourcing their IT services to Satyam Computers has been hit by a major storm of financial deformity.

Spokesperson from NAB confirmed that they have a contingency plan on hold as Satyam was one of the main beneficiaries of NAB. Qantas Airways Ltd laid a seven year agreement with Satyam Computers for IT support and assistance of which five years are yet to complete. In spite of the setback, Qantas seem to be unnerved by the situation as it declared “any risks to business as controllable”.

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Telstra, which has a part of its IT reforms outsourced to Satyam, mentioned that they would seek new strategies considering the ongoing situation into account. They have already sought measures by increasing their IT suppliers from two to four. The Age, an Australian daily newspaper, stated that Satyam has established offices in Sydney, Melbourne and Brisbane and has about 1,700 employees. The scandal has put many local job holders at stake. Analysts refer the scandal as “India’s Enron” in view of the Houston-based energy company that collapsed in stocks in the late 2001. Investors foresee dark days looming on Asia’s third largest economy and on its outsourcing services.

Analysts from ABN Amro report the situation as “precarious” and Mr. Ram Mynampati, Interim chief executive ensured that the situation was pale but Satyam will manage to deal the situation with the receivables for the month. CFO of Satyam Computer Services had resigned this month although he continues to co-operate with the probe of investigation. Ailing to the current situation, the Indian rupee has seen a severe pitfall after the scandal with the BSE tumbling down more than seven percent.