Wipro, the third largest IT outsourcer in India, yesterday revealed that an employee has been embezzling money from it since November 2006.
The company did not reveal the amount of money that had taken and said that most of it had been recovered. However, it was significant enough to cause Wipro to delay filing its annual financial report to the US Security and Exchange Commission.
The news comes as an unwelcome echo of the fraud scandal that befell Satyam, formerly India’s fourth largest IT services provider, in January 2009. Company founded Ramalinga Raju, who confessed to fabricating more than a billion dollars of revenue in the company’s accounts, finally appeared in court today after illness delayed his trial.
Last week, Mahindra Satyam – as it is known since fellow Indian ICT company Tech Mahindra acquired a majority stake – reported its revised financial figures for the past two years. They revealed that the company lost over $200 million in 2009, as customers took their business elsewhere.
This morning, it was reported that private equity firms are considering acquiring UK telco BT’s stake in Tech Mahindra, which plans to merge with Mahindra Satyam over the next two years. Meanwhile, Japanese IT services giant Fujitsu is rumoured to be close to acquiring Indian IT firm Patni.
The Indian IT outsourcing industry has seen something of a comeback in the last six months, returning to the double-digit revenue growth rates that were standard before the credit crunch. However, recent moves by the US and the UK – two of the industry’s largest markets – to limit the influx of migrant workers and the use of offshore outsourcing could curtail that growth in future.