Comments on: Riding the Indian Tiger

Riding the Indian Tiger

the cydonian — Wed, 07 Jan 2009 07:57:08 -0800

Maximum Fraud: Ramalinga Raju, the Chairman of India's fourth largest exporter of IT services, Satyam Computer Services has admitted to falsifying records of at least five thousand crore rupees. Indian regulators are horrified, competitors shocked, chaos has ensued.

Satyam was audited by PriceWater Coopers. Since the company's stock is traded on NASDAQ and Euronext, there are judicial consequences in the US and Europe as well, in addition to a possible jail term in India. This admission comes in the wake of an aborted deal for two infrastructure-related companies owned by the chairman's family, a public censure from the World Bank (with possible corruption) and a $1.6 billion lawsuit.

By: DU

DU — Wed, 07 Jan 2009 08:07:33 -0800

Crore isn't a misspelling. Interesting. (I'm probably the last mefite to know about the Persian numbering system...)

By: Afroblanco

Afroblanco — Wed, 07 Jan 2009 08:17:43 -0800

I love seeing outsourcers suffer. Fuck Thomas Friedman and his walrus moustache. /schadenfreude

By: Dipsomaniac

Dipsomaniac — Wed, 07 Jan 2009 08:17:55 -0800

Wow, it's like even the fraud is being outsourced to India nowadays, isn't it?

By: Rhaomi

Rhaomi — Wed, 07 Jan 2009 08:19:43 -0800

At first I was like, "5000 rupees? Isn't that like a buck-eighty American?" Then I learned that "crore" means 10 million, and that we're talking about 50 billion rupees here (equivalent to just over $5 billion USD). Thanks for the clarification, DU.

By: delmoi

delmoi — Wed, 07 Jan 2009 08:20:23 -0800

A Crore is ten million, so 5 thousand crore would be fifty billion rupees or about one billion dollars, right? Or did I miss a zero somewhere?

By: delmoi

delmoi — Wed, 07 Jan 2009 08:21:37 -0800

Then I learned that "crore" means 10 million, and that we're talking about 50 billion rupees here (equivalent to just over $5 billion USD). According to this 50 rupees is worth about $1.02 USD.

By: Skeptic

Skeptic — Wed, 07 Jan 2009 08:21:41 -0800

we're talking about 50 billion rupees here (equivalent to just over $5 billion USD). So, that's 0.1 Madoffs, then? Amateur!

By: Dumsnill

Dumsnill — Wed, 07 Jan 2009 08:23:07 -0800

Maybe Mr. Raju wasn't too clear on the whole crore concept, either.

By: Skeptic

Skeptic — Wed, 07 Jan 2009 08:24:00 -0800

A Crore is ten million, so 5 thousand crore would be fifty billion rupees or about one billion dollars, right? So, just 0.02 Madoffs, then. Bloody amateur!

By: blue mustard

blue mustard — Wed, 07 Jan 2009 08:24:39 -0800

Henry Blodget wonders "why we should even BOTHER TO HAVE AUDITING FIRMS?"

By: Skeptic

Skeptic — Wed, 07 Jan 2009 08:25:39 -0800

BTW, am I wrong, or didn't PWC also "audit" Madoff? Are they doing an Arthur Andersen?

By: DU

DU — Wed, 07 Jan 2009 08:34:21 -0800

(Didn't mean to derail into terminology. "5000 crore" link in the post tells you exactly how much that is in USD.)

By: the cydonian

the cydonian — Wed, 07 Jan 2009 08:37:31 -0800

_{I kinda deliberately used the term 'crore' here just to explain all of those Indian news articles. If you click on the link, you'll see the number in billions and in USD. :-)}

By: blue mustard

blue mustard — Wed, 07 Jan 2009 08:38:07 -0800

didn't PWC also "audit" Madoff? PWC did not audit Madoff, although they did reportedly audit some of the feeder funds that invested in Madoff.

By: Slap*Happy

Slap*Happy — Wed, 07 Jan 2009 08:47:58 -0800

Old-school IT outsourcing is quietly dying on the vine. Increasingly, companies now outsource departmental functions, like, say, running the CRM system, but the companies they outsource to are first world firms paying first world wages, using refined and proprietary processes and technology rather than cheap labor to improve productivity. The "mythical man-month" means that tossing a ton of personnel at an IT problem won't improve the speed at which it's done, or the quality of the finished product. The Indian outsourcing firms have reduced costs, but have not improved productivity, and productivity is a bigger pay-off for IT investment. I don't see this changing until India has a larger domestic market for IT services - and at that point, the largest customers for Indian outsourcing will be Indian, rather than American or European.

By: Rhaomi

Rhaomi — Wed, 07 Jan 2009 08:48:54 -0800

Sorry for the mix-up/derail. I tried to use Google's currency conversion by searching for "50000000000 rupees in usd" but got a standard SERP instead. Then I misread this page which seemed to answer my question and the rest is history.

By: ericb

ericb — Wed, 07 Jan 2009 09:22:09 -0800

*PriceWaterHouse Cooper*

By: blue mustard

blue mustard — Wed, 07 Jan 2009 09:30:53 -0800

Nitpickyfliter: PricewaterhouseCoopers.

By: Pope Guilty

Pope Guilty — Wed, 07 Jan 2009 09:39:28 -0800

Man, what can't we outsource these days?

By: Gyan

Gyan — Wed, 07 Jan 2009 11:16:02 -0800

Bush.

By: kaibutsu

kaibutsu — Wed, 07 Jan 2009 11:50:30 -0800

And here I thought everyone was excited to be outsourcing the presidency to a Kenyan.

By: Lipstick Thespian

Lipstick Thespian — Wed, 07 Jan 2009 15:58:50 -0800

I couldn't contain my schadenfreudic glee when I read this today. I love how bilious, semi-apologetic backpedalling doesn't sound any better when it pops out of an Indian CEOs mouth.