Merrill Lynch to ditch Satyam for Tata
- 17 February, 2009 01:18
Merrill Lynch will move many of its IT contracts from struggling Indian software firm Satyam Computer Services to rival Tata Consultancy Services, according to Indian newspaper The Economic Times.
Satyam Computer Services his by $1 billion accounting fraud scandal
The ET said the investment bank informed Satyam of plans to switch the bulk of its contracts to Tata after sending a team in early February to assess the situation at the crisis-stricken Indian outsourcer.
The Merrill account contributed about $40 million (£27.58m) to Satyam's yearly revenues, the newspaper says, citing "software industry sources familiar with the matter".
The news is another blow to Satyam, which has been struggling for survival following revelations of a massive accounting fraud perpetrated by its founder Ramalinga Raju. In India's biggest corporate scandal, Raju resigned after admitting that accounts had been overstated and about $1 billion in cash and bank balances were missing.
At time of writing, Satyam was unable to comment at time of writing and Merrill Lynch had not returned calls.
"IT companies win and lose contracts all the time," Satyam's government-appointed chairman Kiran Karnik told ET. "I do not know why the media has to report it all the time."
Merrill Lynch was also Satyam's principal banking adviser, but resigned its mandate in January, within hours of the revelations of the fraud, citing "material accounting irregularities" for its decision.