'ANZ Bank reviews impact of its exposure to Satyam'
Australian banking major ANZ Bank is reviewing the impact of its exposure to Indian software exporter Satyam Computer Services following the more than one bn dollar accounting fraud in the IT firm.business Updated: Jan 12, 2009 13:08 IST
Australian banking major ANZ Bank is reviewing the impact of its exposure to Indian software exporter Satyam Computer Services following the more than one billion dollar accounting fraud in the IT firm, says a media report.
"Another major local bank is studying the impact of its exposure to Satyam Computer Services'...", The Australian said in a report.
ANZ Bank has around 100 Satyam contractors who support IT projects. They are mainly based at the bank's Indian subsidiary, which employs about 2,000 people, it said. Last week, the bank told employees that it would develop a contingency plan although its relationship with Satyam was "modest".
"The relationship involves a number of Satyam staff who support development and testing on information technology projects. This means there is no effect at all on ANZ's day to day IT operations," ANZ operations technology and shared services group Managing Director David Cartwright was quoted as saying by The Australian.
"(As) for the technology development projects that Satyam contract staff are supporting, we are currently assessing key person dependences and developing a plan for how we manage through the situation," Cartwright added. Further, the bank believes that while there is some work to do on this, it would be able to take the issues at Satyam in our stride and largely get on with business as usual given the depth of its own IT resources and relationships with a range of IT vendors globally.
However, unlike other blue-chip companies such as National Australia Bank, Telstra and Qantas, ANZ doesn't have any long-term contracts with the Hyderabad-based company. Besides, other local customers are assessing their contractual obligations with Satyam.
The report further added that a multi-million-dollar software facility being built on Deak in University's campus in Geelong is also under a cloud as the future of Satyam remains uncertain.
On Wednesday, Satyam's founder-chairman B Ramalinga Raju admitted of inflating the accounts of the firm and was later arrested with B Rama Raju, his brother and co-founder, on charges of criminal breach of trust, criminal conspiracy, cheating, falsification of records and forgery. Satyam chief financial officer Srinivas Vadlamani was also arrested on Saturday.
The Satyam fraud case has forced the Indian government to appoint three members to the board of Satyam after it dismissed the incumbent board to restore investors confidence.