Since early December 2008, Sreehari Gopalakrishnan has applied to 176 firms, and the rate of call back has steadily declined.
"Earlier, it used to be from 20 to 30 places but now it is less than 10 per cent", says Gopalakrishnan, an analyst with a firm in Connecticut that does relocation management. With the current economic downturn and the housing slump, his company has several houses in its inventory worth millions of dollars.
His current firm hired him over three years ago on an H1B visa. When the visa expired in December 2008, the company gave him an extension for two months. "They knew me and liked my work, so they gave me the extra time," said Gopalakrishnan. However, that extension expires at the end of February.
His firm cannot ask for another extension. It has filed for a Green Card in his name, but that application is still in its final stages of processing. The company has over 200 people working on H1Bs, he says, of whom many have been asked to leave, while others await with anxiety the day their employment will be terminated.
Gopalakrishnan has been sending out job applications at a frenetic pace, but responses are increasingly few and far between, he says. Many of the companies that do respond are eliminated because of his visa scenario. "No one wants to go that extra mile of sponsoring you," he says, adding that companies prefer workers who have residency. In some cases, he says, he reached the last round of interviews, but then lost out because of his visa situation.
As the problem mounts, workers in US companies have begun seeking jobs in Canada, various European countries and also in Asian countries like Hong Kong. "They are not hit as bad," Gopalakrishnan says. "Plus, the grass is always greener on the other side."
For Varun Sharma, an associate with Merrill Lynch on an H1B visa, the next few weeks will be crucial. As on date, his position with Bank of America seems secure -- but that can change overnight, he says. Against the background of talk that companies caught up in the financial crunch will first lay off guest workers, tensions have been mounting.
"When such talk begins, you realize that this is not your country; that you can get kicked out at any time," Sharma says. "In this situation, there is considerable anxiety, fuelled by rumours."
Sharma believes that his visa will automatically transfer from Merrill Lynch to Bank of America, but even so he has started taking measures to guard against potential problems. "I was never extravagant, but now I am even more careful," says Sharma, discussing the ways he has been cutting down on spending. "I don't randomly spend $100 like I used to." Friends who took cabs to work now take the subway, he says. "It is a tough time. Everybody has to cut down."
Friends who have been laid off have begun seeking jobs in India. "People are not talking about it clearly, but they are considering options back home even if the pay is less," he says. Others are looking for opportunities in small hedge funds, and are willing to work for really low pay.
Sharma believes he is safe, but has been keeping his eyes open for opportunities. He visited the London office of Merrill Lynch to see how operations there are doing. "I am obviously talking to people, but not as seriously," says Sharma, arguing that he is reluctant to jump ship because those who survive the recession will likely emerge stronger.
"It is only a matter of time," he believes. "The recovery will not be as fast as we wish, but the economy will recover." He believes that people from India who seek work visas need to understand that the US is not the dreamland people perceive it to be; when you get here, he says, you are forced to tone down your expectations. "When I came here, I wanted to buy a car in my second year and a home in my fourth year, but all that has to change," said Sharma.
The situation is far more critical for those who have lost their jobs, and have a deadline to vacate the country. Vivek Joshi never imagined that on February 6, he would come in to work and realize that he no longer had the job he has been doing for two years, in the Minneapolis office of a consulting firm.
Joshi worked with the company's health and financial services, setting up business processes. On that day, he was asked to leave, without any notice. "They have provided me a severance package which they are going to provide as a lump sum amount," said Joshi. He now has 30 days to look for another job so that he can transfer his H1B and remain in the US -- and he cannot afford to be picky. Any firm that will transfer his visa, and give him employment commensurate with his qualifications and experience, will do, he says.
Showing posts with label Business. Show all posts
Showing posts with label Business. Show all posts
Friday, February 20, 2009
Thursday, February 19, 2009
Satyam employees in Green Card fix
Of the approximately 11,000 employees of Satyam USA, 7,000 are on H1B visas, says Mathew Daniel, a vice president of US operations at the company.
Though Satyam has faced considerable problems following the January 7 confession by its founder Ramalinga Raju of fraud, Daniel says Satyam has no plans to lay off any employees. Though insurance giant State Farm became the latest client to withdraw its contract with the scandal-tainted company, Daniel said Satyam has acquired 15 new clients in January alone.
On the ground, though, reports suggest that many Satyam employees have begun shopping around for alternate employment. Further, those applied for Green Cards through the company could face problems, according to Buffalo, New York-based attorney Danielle Rizzo. "Satyam's fraud has created a minefield of immigration problems for its foreign national employees in the United States," she said.
"It is possible that Satyam's I-140 petitions, whether pending or approved, will be denied or revoked for fraud. An essential piece of an I-140 petition is the petitioner's showing that it has the ability to pay the beneficiary's proffered wages. Satyam has admitted to accounting fraud, meaning that the I-140 petitions all necessarily relied on fraudulent documents," Rizzo said.
"I think the chances of I-140 revocation, even for approved petitions, are quite high. Even though it is not the employees' fault, the petition is filed by the employer and one of the key requirements in an I-140 is the employer's submission of evidence of its ability to pay.
"USCIS regulations require that evidence of ability to pay be submitted in the form of audited financial statements, federal income tax returns, or an annual report filed with the SEC. Clearly any of these documents would have contained fraudulent financial information. It is not only the beneficiary's fraud that would invalidate a petition but the petitioner's as well," she said.
Some of Rizzo's clients have filed petitions on behalf of former Satyam employees. "We have filed for more than two dozen people. Other law offices might also be filing for Satyam employees. We can assume that a sizeable number of workers are moving out," she said.
Those working at State Farm are among the ones leading the rush to the exit. Satyam can farm them out to other clients, but that requires approval from the USCIS, which may not be forthcoming.
The American Competitiveness in the Twenty First Century Act (AC21) permits post-6th year H-1B extensions in three-year increments if their I-140 petition has been approved, and whose priority date is not current. But if the USCIS cancels their I-140 approval later, the employees lose their legal status. They have to start the labour certification process all over again.
The AC21 also allows portability, meaning one can move to another company if his I-140 is approved and his I-485 petition has been pending for 180 days. But if the I-140 is revoked or withdrawn, it is not portable, except if it is withdrawn after the I-485 has been pending for 180 days.
"But revocation for fraud is not a withdrawal; thus the I-140 would no longer be valid for permanent portability purposes. Based on the high likelihood that Satyam's I-140 petitions will all be revoked, the safest course of action for former Satyam employees would thus be to start a new green card application from scratch as soon as possible with a new employer," Rizzo said.
Revocation of an approved I-140 for fraud also results in the beneficiary losing the priority date established by the petition, and underlying labour certification. Satyam employees who find new US employers can start the green card process afresh with a new PERM application. However, if the Satyam I-140 petition is revoked prior to their receipt of a Green Card, the earlier priority date is likely to be lost.
"It would appear that as US companies terminate their contracts with Satyam, there will be US consulting companies vying for those contracts who are more than willing to sponsor former Satyam employees for non-immigrant status and potentially also for new Green Card applications," Rizzo noted. "Because of the legal complications created by Satyam's fraud, however, each of these cases must be carefully analyzed by an immigration attorney."
Officials with Satyam say they foresee no such problems. The Securities and Exchange Commission has not taken any action against the company in the US, and unless the SEC takes action, the USCIS cannot take cognizance, they point out.
Though Satyam has faced considerable problems following the January 7 confession by its founder Ramalinga Raju of fraud, Daniel says Satyam has no plans to lay off any employees. Though insurance giant State Farm became the latest client to withdraw its contract with the scandal-tainted company, Daniel said Satyam has acquired 15 new clients in January alone.
On the ground, though, reports suggest that many Satyam employees have begun shopping around for alternate employment. Further, those applied for Green Cards through the company could face problems, according to Buffalo, New York-based attorney Danielle Rizzo. "Satyam's fraud has created a minefield of immigration problems for its foreign national employees in the United States," she said.
"It is possible that Satyam's I-140 petitions, whether pending or approved, will be denied or revoked for fraud. An essential piece of an I-140 petition is the petitioner's showing that it has the ability to pay the beneficiary's proffered wages. Satyam has admitted to accounting fraud, meaning that the I-140 petitions all necessarily relied on fraudulent documents," Rizzo said.
"I think the chances of I-140 revocation, even for approved petitions, are quite high. Even though it is not the employees' fault, the petition is filed by the employer and one of the key requirements in an I-140 is the employer's submission of evidence of its ability to pay.
"USCIS regulations require that evidence of ability to pay be submitted in the form of audited financial statements, federal income tax returns, or an annual report filed with the SEC. Clearly any of these documents would have contained fraudulent financial information. It is not only the beneficiary's fraud that would invalidate a petition but the petitioner's as well," she said.
Some of Rizzo's clients have filed petitions on behalf of former Satyam employees. "We have filed for more than two dozen people. Other law offices might also be filing for Satyam employees. We can assume that a sizeable number of workers are moving out," she said.
Those working at State Farm are among the ones leading the rush to the exit. Satyam can farm them out to other clients, but that requires approval from the USCIS, which may not be forthcoming.
The American Competitiveness in the Twenty First Century Act (AC21) permits post-6th year H-1B extensions in three-year increments if their I-140 petition has been approved, and whose priority date is not current. But if the USCIS cancels their I-140 approval later, the employees lose their legal status. They have to start the labour certification process all over again.
The AC21 also allows portability, meaning one can move to another company if his I-140 is approved and his I-485 petition has been pending for 180 days. But if the I-140 is revoked or withdrawn, it is not portable, except if it is withdrawn after the I-485 has been pending for 180 days.
"But revocation for fraud is not a withdrawal; thus the I-140 would no longer be valid for permanent portability purposes. Based on the high likelihood that Satyam's I-140 petitions will all be revoked, the safest course of action for former Satyam employees would thus be to start a new green card application from scratch as soon as possible with a new employer," Rizzo said.
Revocation of an approved I-140 for fraud also results in the beneficiary losing the priority date established by the petition, and underlying labour certification. Satyam employees who find new US employers can start the green card process afresh with a new PERM application. However, if the Satyam I-140 petition is revoked prior to their receipt of a Green Card, the earlier priority date is likely to be lost.
"It would appear that as US companies terminate their contracts with Satyam, there will be US consulting companies vying for those contracts who are more than willing to sponsor former Satyam employees for non-immigrant status and potentially also for new Green Card applications," Rizzo noted. "Because of the legal complications created by Satyam's fraud, however, each of these cases must be carefully analyzed by an immigration attorney."
Officials with Satyam say they foresee no such problems. The Securities and Exchange Commission has not taken any action against the company in the US, and unless the SEC takes action, the USCIS cannot take cognizance, they point out.
Wednesday, February 18, 2009
'2009 to be most painful for Indian economy'
2009 is likely to be the most painful year for the Indian economy, prophesies Madhabi Puri-Buch, managing director and chief executive officer of ICICI Securities. However, she is optimistic that the two fiscal stimulus packages announced by the Indian government will have a positive impact on the economy, the results of which will surface in 2010.
In a freewheeling interview with rediff.com soon after she took over the reins at ICICI Securities, Madhabi Puri-Buch discussed the current economic scenario, the impact of recession on India, the reasons behind foreign institutional investors not finding India attractive anymore, and the solution to the housing problem in India in the backdrop of rising real estate prices and interest rates showing some degree of volatility.
What's your assessment of the current economic scenario? Everybody's talking about recession. Are we slowly slipping into a recession?
There is actually no doubt about it. The numbers (GDP) have come in. Almost all the economies across the world are showing negative growth and it certainly is a full-fledged recession. I don't think there is any doubt about that anymore.
The expectation is that perhaps in calendar year 2010 we will feel the positive impact of fiscal stimuli doses injected by various nations on the global economy. But at the same time there is worry that while growth will come back there could also be a significant impact on inflation and interest rates. If this happens simultaneously it could be a really difficult period.
However, in India we are fortunate that a large part of our growth comes from domestic demand. Agri sector has done well -- the rabi crop sowing is over now and is expected to be much better than the previous kharif crop as well as much better than the previous rabi crop. So we expect agri sector to grow well.
Manufacturing, perhaps, may see a little bit of a problem. Overall, the general consensus is we will close this year at 7 per cent (GDP growth) and next year possibly in the region of 4 to 5 per cent.
Thursday, February 12, 2009
Awesome beauties at Asia's largest air show
India firmly ruled out cut in defence spending despite economic downturn, as top aviation companies vying to secure the prized deal to supply 126 fighter aircraft to IAF, showcased their products at the 'Aero India 2009' which got off to a flying start in Bangalore on Wednesday.
Keeping in mind the country's security interests, the government will not slash defence expenditure despite economic recession, Defence Minister A K Antony said inaugurating the five-day biennial event in which 26 countries are participating.
Saturday, February 7, 2009
Raju in 'protective custody', says ex-Sebi chief
The scam-hit Satyam Computer founder B Ramalinga Raju, brother Rama Raju and ex-chief financial officer Srinivas are in 'protective custody', former Securities and Exchange Board of India chief M Damodaran said in Ahmedabad on Saturday.
He was replying to a query during a seminar of 'Venture Capital-Leverage' at IIM-A on inability of Sebi to question Ramalinga Raju due to some alleged legal restrictions.
Referring to his definition of protective custody, Damodaran said, "This is a peculiar case in which the police produced a person before the court and was granted judicial custody, not police custody."
Normally, cops insist for police custody in order to talk to them first and extract vital details. That is why they arrest people, he added.
"Instead, the police happily handed over them in judicial custody, so that Sebi needs to get court's permission first," Damodaran said.
"This is what I call that Ramalinga Raju, his brother Rama Raju, and Chief Financial Officer Vadlamani Srinivas are in protective custody," he added. "I don't know how the law will help when the state decides to provide protective custody," Damodaran said.
He was replying to a query during a seminar of 'Venture Capital-Leverage' at IIM-A on inability of Sebi to question Ramalinga Raju due to some alleged legal restrictions.
Referring to his definition of protective custody, Damodaran said, "This is a peculiar case in which the police produced a person before the court and was granted judicial custody, not police custody."
Normally, cops insist for police custody in order to talk to them first and extract vital details. That is why they arrest people, he added.
"Instead, the police happily handed over them in judicial custody, so that Sebi needs to get court's permission first," Damodaran said.
"This is what I call that Ramalinga Raju, his brother Rama Raju, and Chief Financial Officer Vadlamani Srinivas are in protective custody," he added. "I don't know how the law will help when the state decides to provide protective custody," Damodaran said.
Friday, February 6, 2009
Tata Motors may roll out Nano on March 3
Tata Motors' Nano, the small car seen as a symbol of India's expertise in frugal engineering, is likely to be launched on March 3. Billed as the world's cheapest, the small car's first recipients may be celebrities, including political leaders, social workers, sports stars and film stars.
Government officials said the company had chosen March 3 as the launch date because it is the birth anniversary of Tata Group founder, Jamsetji Tata. However, the details had not yet been firmed up.
When contacted, a spokesperson for Tata Motors said, "We have not announced an official date or any marketing plans so far."
Sources in the government, however, said: "The Tatas are planning to give Nano to celebrities initially. Senior Tata officials had discussed this at the Vibrant Gujarat Summit recently."
Those likely to figure in the list include President Pratibha Patil, Prime Minister Manmohan Singh, Congress President Sonia Gandhi and Opposition Leader LK Advani.
The company may also reserve a Nano for Buddhadeb Bhattacharjee, the chief minister of West Bengal, where it was to be made initially. Others likely to get it are sports stars like Sania Mirza, Sachin Tendulkar and Mahendra Singh Dhoni. Still others may be those who endorse Tata brands, like actors Aamir Khan, Ajay Devgan and Kajol.
Narendra Modi, the chief minister of Gujarat, who was instrumental in attracting the Nano plant to Gujarat after it failed to take off in West Bengal owing to political controversy over land acquisition, may also be given the car.
"This marketing strategy will help the Tatas brand the common man's car as people's car. It will be a car for the masses," sources said.
However, the masses may have to brave a waiting period as Tata Motors dealers will start taking bookings for the car before the Sanand factory reaches full production. The booking amount is likely to be Rs 70,000 a car.
The standard model will be available for Rs 1 lakh and there will two other models priced at Rs 1.24 lakh and Rs 1.34 lakh.
Government officials said the company had chosen March 3 as the launch date because it is the birth anniversary of Tata Group founder, Jamsetji Tata. However, the details had not yet been firmed up.
When contacted, a spokesperson for Tata Motors said, "We have not announced an official date or any marketing plans so far."
Sources in the government, however, said: "The Tatas are planning to give Nano to celebrities initially. Senior Tata officials had discussed this at the Vibrant Gujarat Summit recently."
Those likely to figure in the list include President Pratibha Patil, Prime Minister Manmohan Singh, Congress President Sonia Gandhi and Opposition Leader LK Advani.
The company may also reserve a Nano for Buddhadeb Bhattacharjee, the chief minister of West Bengal, where it was to be made initially. Others likely to get it are sports stars like Sania Mirza, Sachin Tendulkar and Mahendra Singh Dhoni. Still others may be those who endorse Tata brands, like actors Aamir Khan, Ajay Devgan and Kajol.
Narendra Modi, the chief minister of Gujarat, who was instrumental in attracting the Nano plant to Gujarat after it failed to take off in West Bengal owing to political controversy over land acquisition, may also be given the car.
"This marketing strategy will help the Tatas brand the common man's car as people's car. It will be a car for the masses," sources said.
However, the masses may have to brave a waiting period as Tata Motors dealers will start taking bookings for the car before the Sanand factory reaches full production. The booking amount is likely to be Rs 70,000 a car.
The standard model will be available for Rs 1 lakh and there will two other models priced at Rs 1.24 lakh and Rs 1.34 lakh.
Thursday, January 29, 2009
US House passes $819 bn stimulus package
The US House of Representatives has passed the $819 billion mega stimulus package, which is aimed at reviving American economy that is reeling under the worst ever crisis since the great depression of last century.
The stimulus package passed by the House of Representatives by 244-188 votes, however, failed to receive even a single vote from the opposition Republican lawmakers, marking the first major setback to President Barack Obama in gaining bipartisan support to his major policy decisions.
Obama had spent hours on Tuesday meeting Republican leaders at the Capitol Hill making his personal appeal to them.
Eleven Democrats also voted against the American Recovery and Reinvestment Act, which now moves to the Senate for vote, before it could be signed into law by Obama.
In a statement, soon thereafter Obama hoped that it would receive bipartisan support in the Senate.
"I hope that we can continue to strengthen this plan before it gets to my desk. But what we can't do is drag our feet or allow the same partisan differences to get in our way.
"We must move swiftly and boldly to put Americans back to work and that is exactly what this plan begins to do," he said.
At a time when thousands of jobs are being lost every week, the American Recovery and Reinvestment Act is expected to create more than three million new jobs in the next few years, besides inducing massive investment into the US infrastructure sector.
The stimulus package passed by the House of Representatives by 244-188 votes, however, failed to receive even a single vote from the opposition Republican lawmakers, marking the first major setback to President Barack Obama in gaining bipartisan support to his major policy decisions.
Obama had spent hours on Tuesday meeting Republican leaders at the Capitol Hill making his personal appeal to them.
Eleven Democrats also voted against the American Recovery and Reinvestment Act, which now moves to the Senate for vote, before it could be signed into law by Obama.
In a statement, soon thereafter Obama hoped that it would receive bipartisan support in the Senate.
"I hope that we can continue to strengthen this plan before it gets to my desk. But what we can't do is drag our feet or allow the same partisan differences to get in our way.
"We must move swiftly and boldly to put Americans back to work and that is exactly what this plan begins to do," he said.
At a time when thousands of jobs are being lost every week, the American Recovery and Reinvestment Act is expected to create more than three million new jobs in the next few years, besides inducing massive investment into the US infrastructure sector.
Wednesday, January 28, 2009
9 stocks you must invest in now
The current challenging times and the sharp correction in the equity markets have led to a dramatic fall in stock valuations. However, picking a stock for investment has also become an equally difficult task, given the increasing risk as corporate performance becomes unpredictable.
Little wonder then that stock markets have turned volatile and sentiment is weak. Investors have turned wary and their appetite for risk has almost vanished.
Simultaneously, interest rates have started falling and bank fixed deposits now provide a return of between 3.5 and 8 per cent annually, which suggests that returns on the so-called safer assets are diminishing.
In this scenario, the strategy to invest in high dividend yield stocks would make good sense. The Smart Investor crunched numbers of all companies listed on the BSE with a market capitalisation of over Rs 100 crore (Rs 1 billion) and a dividend yield of about five per cent or more.
In addition, factors like growth prospects, leverage (in terms of debt-to-equity), revenue track record and cash flows were also considered to arrive at the shortlist of nine investment-worthy companies.
These attributes should not only ensure dividends in future, but also indicate that there is potential for capital appreciation in the longer run. Apart from these nine companies, there are 15 more that offer high dividend yield and deserve attention.
Friday, January 16, 2009
Raju's bail plea to be heard today
The bail petition of Satyam Computer's former chairman B Ramalinga Raju will come up for discussion before the Sixth Metropolitan Magistrate court in Hyderabad on Friday.
The petition will be argued by four senior lawyers on behalf of Ramalinga Raju and two others, Ramalinga Raju's advocate Bharat Kumar told PTI.
However, Kumar refused to divulge on which grounds the bail petition was filed, but said there is a strong basis to the petition.
Ramalinga Raju and his brother Rama Raju were arrested by the Andhra police on January 9 and were sent to judicial custody till January 23 on charges of financial fraud to the tune of Rs 7,800 crore (Rs 78 billion).
They were booked under IPC sections 120 B (criminal conspiracy), 420 (cheating), 409 (criminal breach of trust), 468 (forgery) and 471 (falsification of records). All these charges are non-bailable offences.
The local court will also take up the petition filed by Sebi seeking permission to interrogate Ramalinga Raju in the same case.
Sebi had summoned Ramalinga Raju to appear before its officials with records and documents on January 9, but Bharat Kumar had represented the former Satyam Computer chairman.
Sources say that Sebi's probe is focusing more on insider trading, and fraudulent and unfair trade practices, besides non-disclosures under various regulations in the Sebi Act.
Saturday, January 10, 2009
Ramalinga Raju, brother arrested
Two days after shocking the country by admitting to Rs 7,800-crore fraud, Satyam founder Ramalinga Raju and his brother Rama Ramju were arrested on Friday night as part of the crackdown by state authorities and the central government, which disbanded the tainted IT firm's board on a day of fast-paced developments. Fifty four-year-old Raju, who stepped down as Chairman after admitting to the fraud on Wednesday, and Rama Raju, who resigned as CEO and MD of the company, were arrested by the police on charges of criminal conspiracy, cheating, forgery, misappropriation of funds and criminal breach of trust.
Director General of Police S S P Yadav said that the company's Chief Financial Officer Valdamani Srinivasan would be arrested on Saturday.
Yadav said Raju was booked under various sections of IPC that include criminal breach of trust, cheating and forgery. All the sections, under which the FIR has been filed against the two brothers, are non-bailable.
The police continue to interrogate Ramalinga Raju and his brother at the Director General of Police office well past the mid-night.
Director CB-CID V S Kaumudi told media persons outside the Director General of Police's office that the cops would seek custody of the brothers when they are produced before the court on Saturday. He said they were arrested on the basis of a complaint filed by an investor.
Raju, whose whereabouts were a matter of speculation ever since he made the startling disclosure on Wednesday about the Rs 7,800 crore financial fraud, had been in hiding and was summoned to appear before the SEBI on Saturday.
Commenting on the decision of Raju to surrender, senior partner of the law firm Titus and Company, Diljeet Titus said, "By taking the decision, he (Raju) is trying to mitigate his penalty and reduce the term of conviction."
He further said that 'on the basis of his January 7 letter, the government can initiate civil and criminal action against him. It is a letter of confession'.
The government, Titus said, can file a supplementary FIR as well in the case.
Raju has been booked under the sections of IPC that include 120-B, 409, 420, 468 and 471. These sections pertain to criminal conspiracy, criminal breach of trust, cheating, forgery and using forged documents as genuine. Under these sections, he can face imprisonment up to 10 years and fine.
Earlier this evening, the government disbanded the current board of Satyam Computer and announced that it would nominate 10 directors on its board.
Corporate Affairs Minister Prem Chand Gupta said in New Delhi that the names of the new members would be announced soon for the board, which would meet in the next seven days.
The existing board of the company was scheduled to meet on Saturday to discuss the crisis that has engulfed the company and its over 50,000 employees.
Founder of Satyam B Ramalinga Raju, who has been summoned by market regulator SEBI on Saturday, had resigned as Chairman after disclosing staggering financial fraud. Five other directors had also resigned leaving the strength only at three.
Announcing the decision, Corporate Affairs Minister Prem Chand Gupta said: "The current board ceases to exist and there would not be any meeting on Saturday. The new board will meet in the next seven days."
The government's decisive action came nearly 60 hours after the startling disclosure by Raju, presumed to have strong political friends, that put the company and its over 50,000 employees fate in limbo.
Director General of Police S S P Yadav said that the company's Chief Financial Officer Valdamani Srinivasan would be arrested on Saturday.
Yadav said Raju was booked under various sections of IPC that include criminal breach of trust, cheating and forgery. All the sections, under which the FIR has been filed against the two brothers, are non-bailable.
The police continue to interrogate Ramalinga Raju and his brother at the Director General of Police office well past the mid-night.
Director CB-CID V S Kaumudi told media persons outside the Director General of Police's office that the cops would seek custody of the brothers when they are produced before the court on Saturday. He said they were arrested on the basis of a complaint filed by an investor.
Raju, whose whereabouts were a matter of speculation ever since he made the startling disclosure on Wednesday about the Rs 7,800 crore financial fraud, had been in hiding and was summoned to appear before the SEBI on Saturday.
Commenting on the decision of Raju to surrender, senior partner of the law firm Titus and Company, Diljeet Titus said, "By taking the decision, he (Raju) is trying to mitigate his penalty and reduce the term of conviction."
He further said that 'on the basis of his January 7 letter, the government can initiate civil and criminal action against him. It is a letter of confession'.
The government, Titus said, can file a supplementary FIR as well in the case.
Raju has been booked under the sections of IPC that include 120-B, 409, 420, 468 and 471. These sections pertain to criminal conspiracy, criminal breach of trust, cheating, forgery and using forged documents as genuine. Under these sections, he can face imprisonment up to 10 years and fine.
Earlier this evening, the government disbanded the current board of Satyam Computer and announced that it would nominate 10 directors on its board.
Corporate Affairs Minister Prem Chand Gupta said in New Delhi that the names of the new members would be announced soon for the board, which would meet in the next seven days.
The existing board of the company was scheduled to meet on Saturday to discuss the crisis that has engulfed the company and its over 50,000 employees.
Founder of Satyam B Ramalinga Raju, who has been summoned by market regulator SEBI on Saturday, had resigned as Chairman after disclosing staggering financial fraud. Five other directors had also resigned leaving the strength only at three.
Announcing the decision, Corporate Affairs Minister Prem Chand Gupta said: "The current board ceases to exist and there would not be any meeting on Saturday. The new board will meet in the next seven days."
The government's decisive action came nearly 60 hours after the startling disclosure by Raju, presumed to have strong political friends, that put the company and its over 50,000 employees fate in limbo.
Does Satyam have cash to pay salaries?
Beleaguered Satyam management, struggling to set its house in order, is facing a major challenge to fight rumours and disinformation particularly relating to employees and their salaries.
The day started with a 'rumour' by some Satyam employees that there was an internal e-mail that talks about layoffs and uncertainty about salaries over the next two months, but it was later found that there was no such internal communication.
* The Satyam fiasco: Complete coverage
"No such e-mail exists," a Satyam spokesperson told PTI, adding that because of the uncertainty of the situation there are all kinds of rumours floating. But the management is doing everything in its ability to reach out to its employees and ensure that their future is safe.
Asked if the rumours could also have been generated by comments made by acting CEO Ram Mynampati that though the company had ensured the December salary for its 53,000 strong workforce, liquidity was a cause for concern, she said: "It looks like he may have been misinterpreted."
Debunking all the speculation and rumours about the employees, the spokesperson said that the workforce was intact and there was no plan to downsize.
However, Satyam did not confirm if it has enough cash to pay the salaries of all it employees.
Employees at the company said on condition of anonymity that they were hearing about imminent lay-off of people who were sitting on the bench or were close to completing their assigned projects. Besides, those being retained would be asked to take substantial salary cuts, they added.
At the same time, global HT consultancy firm Hay Group's Practice Leader Mark Thompson said that employees would suffer the most from the fraud.
Global HR consultancy firm HayGroup's Practice Leader Mark Thompson said: "Based on past experience . . . as with Enron, Worldcom and the Mirror Group, it is likely to be the employees who will suffer most from the fraud perpetrated by their bosses."
In early 2000, the collapse of energy trader Enron had left thousands of people out of work, another 8,500 had lost their jobs at accounting firm Arthur Andersen; and Tyco eliminated 15,000 employees in February.
Analysts at technology research firm Forrester said employees and clients would soon desert the company amid competitive wooing by the rivals.
The research firm added that it has already been consulted by over half-a-dozen rivals of Satyam on competitive strategies to be adopted to take over the business from the clients of the beleaguered IT firm.
Satyam on Wednesday made a shocking disclosure of fudging of accounts by its founder Ramalinga Raju, who then quit as chairman, leaving an uncertain future for the company and its 53,000 employees.
Raju, in a statement on Wednesday, said Satyam's profits had been massively inflated over many years but no other board member was aware of the financial irregularities.
The timing of this news is the most unfortunate part about it given the fragile state of the global economy, Hay Group's Thompson said.
The scandal will damage corporate India's reputation, may have implications for the whole BPO and IT Services sector and would certainly give some 'hotheads in the US a little more ammunition to use against the logic of outsourcing to India,' Thompson said.
"However, there will not be a long term impact on the employer-employee relationship.
Instead, we may get tied up with a series of reviews into corporate governance and a host of new regulations attempting to prevent this kind of thing from happening again," Thompson added.
Another global staffing services firm Manpower said at this point of time 'employees should assess their current skill sets and explore the opportunities in sectors showing positive hiring intent like energy, telecom and mining.'
Executive search firm Headhunters India's CEO Krish Lakshmikanth has said the company might lay off over 10,000 employees by the next month as it has little cash to pay salaries.
"It is most likely that Satyam will cut 10,000 jobs next month as the company is left with no cash to pay the salaries.
The current fiasco is likely to put pressure on salaries, which may reduce by 10 per cent due to the surplus of about 20,000 people in the jobs market," Lakshmikanth said.
Lakshmikanth said till Tuesday evening there were about 7,800 Satyam employees who had posted their resumes on job sites and by Wednesday afternoon, it rose to 14,000.
Satyam's interim CEO Ram Mynampati said on Thursday the company has taken care of the salary for December, but its liquidity position was not encouraging.
IT-BPO employees union UNITES said, "We are in touch with the senior and top-level management of Satyam, all kind of rumours are doing the rounds but we still do not have any clarity on the isuue."
"It is unlikely that there will be any layoffs as the new management is trying to portray that all is well in Satyam.
Moreover, this being the election year, even if the company do not have money government might chip in to rescue the employees," UNITES general secretary Karthik Shekhar said.
According to the latest Manpoer Employment Outlook Survey hiring intent in IT & ITeS sector has gone down drastically this quarter, compared to the last quarter, but the space is showing a positive hiring intent, with net employment outlook of 23 per cent for the first quarter of 2009.
"In India, IT and ITeS sector has been a low-cost and high-quality player and will surely emerge big again after the crisis," Manpower India added.
Meanwhile, UNITES India, a union of ITeS professionals, has warned that over 50,000 IT professionals in India may lose their jobs over the next six months as the situation in the sector is expected to worsen due to the impact of global meltdown on the export-driven industry.
The day started with a 'rumour' by some Satyam employees that there was an internal e-mail that talks about layoffs and uncertainty about salaries over the next two months, but it was later found that there was no such internal communication.
* The Satyam fiasco: Complete coverage
"No such e-mail exists," a Satyam spokesperson told PTI, adding that because of the uncertainty of the situation there are all kinds of rumours floating. But the management is doing everything in its ability to reach out to its employees and ensure that their future is safe.
Asked if the rumours could also have been generated by comments made by acting CEO Ram Mynampati that though the company had ensured the December salary for its 53,000 strong workforce, liquidity was a cause for concern, she said: "It looks like he may have been misinterpreted."
Debunking all the speculation and rumours about the employees, the spokesperson said that the workforce was intact and there was no plan to downsize.
However, Satyam did not confirm if it has enough cash to pay the salaries of all it employees.
Employees at the company said on condition of anonymity that they were hearing about imminent lay-off of people who were sitting on the bench or were close to completing their assigned projects. Besides, those being retained would be asked to take substantial salary cuts, they added.
At the same time, global HT consultancy firm Hay Group's Practice Leader Mark Thompson said that employees would suffer the most from the fraud.
Global HR consultancy firm HayGroup's Practice Leader Mark Thompson said: "Based on past experience . . . as with Enron, Worldcom and the Mirror Group, it is likely to be the employees who will suffer most from the fraud perpetrated by their bosses."
In early 2000, the collapse of energy trader Enron had left thousands of people out of work, another 8,500 had lost their jobs at accounting firm Arthur Andersen; and Tyco eliminated 15,000 employees in February.
Analysts at technology research firm Forrester said employees and clients would soon desert the company amid competitive wooing by the rivals.
The research firm added that it has already been consulted by over half-a-dozen rivals of Satyam on competitive strategies to be adopted to take over the business from the clients of the beleaguered IT firm.
Satyam on Wednesday made a shocking disclosure of fudging of accounts by its founder Ramalinga Raju, who then quit as chairman, leaving an uncertain future for the company and its 53,000 employees.
Raju, in a statement on Wednesday, said Satyam's profits had been massively inflated over many years but no other board member was aware of the financial irregularities.
The timing of this news is the most unfortunate part about it given the fragile state of the global economy, Hay Group's Thompson said.
The scandal will damage corporate India's reputation, may have implications for the whole BPO and IT Services sector and would certainly give some 'hotheads in the US a little more ammunition to use against the logic of outsourcing to India,' Thompson said.
"However, there will not be a long term impact on the employer-employee relationship.
Instead, we may get tied up with a series of reviews into corporate governance and a host of new regulations attempting to prevent this kind of thing from happening again," Thompson added.
Another global staffing services firm Manpower said at this point of time 'employees should assess their current skill sets and explore the opportunities in sectors showing positive hiring intent like energy, telecom and mining.'
Executive search firm Headhunters India's CEO Krish Lakshmikanth has said the company might lay off over 10,000 employees by the next month as it has little cash to pay salaries.
"It is most likely that Satyam will cut 10,000 jobs next month as the company is left with no cash to pay the salaries.
The current fiasco is likely to put pressure on salaries, which may reduce by 10 per cent due to the surplus of about 20,000 people in the jobs market," Lakshmikanth said.
Lakshmikanth said till Tuesday evening there were about 7,800 Satyam employees who had posted their resumes on job sites and by Wednesday afternoon, it rose to 14,000.
Satyam's interim CEO Ram Mynampati said on Thursday the company has taken care of the salary for December, but its liquidity position was not encouraging.
IT-BPO employees union UNITES said, "We are in touch with the senior and top-level management of Satyam, all kind of rumours are doing the rounds but we still do not have any clarity on the isuue."
"It is unlikely that there will be any layoffs as the new management is trying to portray that all is well in Satyam.
Moreover, this being the election year, even if the company do not have money government might chip in to rescue the employees," UNITES general secretary Karthik Shekhar said.
According to the latest Manpoer Employment Outlook Survey hiring intent in IT & ITeS sector has gone down drastically this quarter, compared to the last quarter, but the space is showing a positive hiring intent, with net employment outlook of 23 per cent for the first quarter of 2009.
"In India, IT and ITeS sector has been a low-cost and high-quality player and will surely emerge big again after the crisis," Manpower India added.
Meanwhile, UNITES India, a union of ITeS professionals, has warned that over 50,000 IT professionals in India may lose their jobs over the next six months as the situation in the sector is expected to worsen due to the impact of global meltdown on the export-driven industry.
Thursday, January 8, 2009
Oil strike: Fuel pumps may run dry today
Many of the 37,000 petrol pumps across the country could go dry by Thursday if the indefinite strike by executives from public sector oil companies continues.
Over 55,000 oil PSU officers from 14 oil companies -- under the umbrella of the Oil Sector Officers Association (OSOA) -- began their indefinite strike on Wednesday demanding higher wages.
Officers of Hindustan Petroleum, the third key retailer in the country with 9,000 outlets after Indian Oil Corporation and Bharat Petroleum, have not joined the strike.
While the state-run refiners are trying to ensure fuel supplies aren't disrupted, dealers across the country say the existing stocks at the petrol pumps will barely last till Thursday.
This is not the impact of the ongoing truckers' strike since most of the oil companies have their own fleet to feed the main cities.
In Delhi, over 300 petrol pumps could suffer due to the shortfall in supply. "My petrol station sells 50,000 litres of diesel and petrol daily. I will suffer a loss of around Rs 15 lakh. There is no fresh supply and my station will go dry by this evening," said Delhi-based Ajay Bansal, general secretary of the Federation of All-India Petroleum Traders.
Federation president Ashok Badhwar said, "We did not pick up enough stock from the refineries as we were expecting a fuel price cut. Now we are worried as our petrol pumps will run dry by tomorrow if the strike is not called off. These officers have gone on strike defying court orders, which is illegal."
Petroleum Minister Murli Deora on Wednesday said the government was looking at another fuel price cut.
The Delhi government has invoked the Essential Services Maintenance Act (ESMA) to deal with the striking officials and truckers. In Mumbai, the situation is no different. "If the strike is not called off in the next 48 hours, it would cripple the petrol pumps. Our fuel tankers are waiting to be refilled. The ongoing transporters strike will also impact the business badly," said Ravi Shinde, president, Petrol Dealers' Association, Mumbai.
The All-India Motor Transport Congress has called a nationwide indefinite strike, which entered its third day today. The Congress has been demanding reduction in diesel price by Rs 10 per litre and tyre prices by 35 per cent, moratorium on payment of installment and waiver of interest on truck finances, moratorium on payment of toll tax for six months and abolition of service tax on any service provided by goods transport agencies.
"While the existing stock of petrol and diesel will last till tomorrow, supply of Compressed Natural Gas (CNG) will be impacted significantly, affecting the public transport system," Shinde added.
Mahanagar Gas, which operates around 130 CNG outlets in Mumbai, said the strike had not impacted their outlets so far but if gas supply from the Oil and Natural Gas Corporation (ONGCfield) in Bombay High was affected, it could impact their operations in the city. "If the situation does not improve, we will go for a phased shutdown of our outlets," said P K Gupta, MD, Mahanagar Gas Ltd.
Over 55,000 oil PSU officers from 14 oil companies -- under the umbrella of the Oil Sector Officers Association (OSOA) -- began their indefinite strike on Wednesday demanding higher wages.
Officers of Hindustan Petroleum, the third key retailer in the country with 9,000 outlets after Indian Oil Corporation and Bharat Petroleum, have not joined the strike.
While the state-run refiners are trying to ensure fuel supplies aren't disrupted, dealers across the country say the existing stocks at the petrol pumps will barely last till Thursday.
This is not the impact of the ongoing truckers' strike since most of the oil companies have their own fleet to feed the main cities.
In Delhi, over 300 petrol pumps could suffer due to the shortfall in supply. "My petrol station sells 50,000 litres of diesel and petrol daily. I will suffer a loss of around Rs 15 lakh. There is no fresh supply and my station will go dry by this evening," said Delhi-based Ajay Bansal, general secretary of the Federation of All-India Petroleum Traders.
Federation president Ashok Badhwar said, "We did not pick up enough stock from the refineries as we were expecting a fuel price cut. Now we are worried as our petrol pumps will run dry by tomorrow if the strike is not called off. These officers have gone on strike defying court orders, which is illegal."
Petroleum Minister Murli Deora on Wednesday said the government was looking at another fuel price cut.
The Delhi government has invoked the Essential Services Maintenance Act (ESMA) to deal with the striking officials and truckers. In Mumbai, the situation is no different. "If the strike is not called off in the next 48 hours, it would cripple the petrol pumps. Our fuel tankers are waiting to be refilled. The ongoing transporters strike will also impact the business badly," said Ravi Shinde, president, Petrol Dealers' Association, Mumbai.
The All-India Motor Transport Congress has called a nationwide indefinite strike, which entered its third day today. The Congress has been demanding reduction in diesel price by Rs 10 per litre and tyre prices by 35 per cent, moratorium on payment of installment and waiver of interest on truck finances, moratorium on payment of toll tax for six months and abolition of service tax on any service provided by goods transport agencies.
"While the existing stock of petrol and diesel will last till tomorrow, supply of Compressed Natural Gas (CNG) will be impacted significantly, affecting the public transport system," Shinde added.
Mahanagar Gas, which operates around 130 CNG outlets in Mumbai, said the strike had not impacted their outlets so far but if gas supply from the Oil and Natural Gas Corporation (ONGCfield) in Bombay High was affected, it could impact their operations in the city. "If the situation does not improve, we will go for a phased shutdown of our outlets," said P K Gupta, MD, Mahanagar Gas Ltd.
Tuesday, January 6, 2009
AP police issue lookout notice against Kampani
The Andhra Pradesh police have issued an "international lookout notice" against JM Financial chairman Nimesh Kampani and 17 others in a case involving Nagarjuna Finance, the non-banking finance company of the Nagarjuna group.
The Hyderabad-based finance company has been charged with defaulting on repayment of deposits worth Rs 100 crore (Rs 1 billion).
A lookout notice is issued in criminal cases and served at exit points of a country. Kampani is currently in Dubai on official work.
RS Praveen Kumar, deputy commissioner of police, Hyderabad, told Business Standard that a lookout notice is an alert message to all immigration counters, which are supposed to inform the police as soon as they locate any of the people mentioned in the notice. "We first detain the people mentioned in the notice and then take a call on whether to arrest them," he said.
Praveen Kumar said the police have nothing against the industry or Kampani in particular. "The issue involves the hard-earned money of 100,000 investors, of which 70 per cent are senior citizens," he said.
Kampani was a director of Nagarjuna Finance when the alleged default took place. He had resigned as a non-executive director in 1999. He was, however, on the board when the NBFC raised deposits from the public.
Police arrested Nagarjuna Finance chairman K S Raju, and PK Madhav, former director of Nagarjuna Finance and the then Maytas Infra CEO, on December 15.
Both were arrested under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishments Act and also under Sections 420 and 406 of the Indian Penal Code.
Another director, GS Raju, was arrested on Saturday when he was awaiting immigration clearance at Indira Gandhi International Airport in New Delhi.
KS Raju was a promoter of Nagarjuna Finance before he divested his holding in favour of a Mumbai-based company, Mahalakshmi Factoring Services, in September 2000.
While JM Financial did not want to comment on the issue today, the company had in a statement released last Tuesday said Kampani is in Dubai and is expected to return to India when he completes his business meetings.
The statement also said police personnel from Hyderabad and Mumbai visited the company's offices on December 29, 2008, for a meeting with Kampani in connection with the Nagarjuna Finance case. Since Kampani was not in town, a senior police official spoke to him over the telephone.
Kampani told him that he was in no way involved with the matter, having resigned as a non-executive director in 1999. He responded to all the questions from the police officer and assured him that he would fully cooperate with the investigations on his return to India. After this, the police officer asked whether he could see Kampani's chamber. The police officer left after the company agreed to the request.
The statement also said the allegations that Kampani was an absconder were false and unfounded and that he was in no way involved in the alleged default offences committed by Nagarjuna Finance because he has had no connection with the company after his resignation in 1999.
Independent observers said the action against Kampani did not make any sense as Nagarjuna Finance's annual reports in 1999 and 2000 quoted the auditors as saying that the company's fixed deposits were fully serviced.
The Hyderabad-based finance company has been charged with defaulting on repayment of deposits worth Rs 100 crore (Rs 1 billion).
A lookout notice is issued in criminal cases and served at exit points of a country. Kampani is currently in Dubai on official work.
RS Praveen Kumar, deputy commissioner of police, Hyderabad, told Business Standard that a lookout notice is an alert message to all immigration counters, which are supposed to inform the police as soon as they locate any of the people mentioned in the notice. "We first detain the people mentioned in the notice and then take a call on whether to arrest them," he said.
Praveen Kumar said the police have nothing against the industry or Kampani in particular. "The issue involves the hard-earned money of 100,000 investors, of which 70 per cent are senior citizens," he said.
Kampani was a director of Nagarjuna Finance when the alleged default took place. He had resigned as a non-executive director in 1999. He was, however, on the board when the NBFC raised deposits from the public.
Police arrested Nagarjuna Finance chairman K S Raju, and PK Madhav, former director of Nagarjuna Finance and the then Maytas Infra CEO, on December 15.
Both were arrested under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishments Act and also under Sections 420 and 406 of the Indian Penal Code.
Another director, GS Raju, was arrested on Saturday when he was awaiting immigration clearance at Indira Gandhi International Airport in New Delhi.
KS Raju was a promoter of Nagarjuna Finance before he divested his holding in favour of a Mumbai-based company, Mahalakshmi Factoring Services, in September 2000.
While JM Financial did not want to comment on the issue today, the company had in a statement released last Tuesday said Kampani is in Dubai and is expected to return to India when he completes his business meetings.
The statement also said police personnel from Hyderabad and Mumbai visited the company's offices on December 29, 2008, for a meeting with Kampani in connection with the Nagarjuna Finance case. Since Kampani was not in town, a senior police official spoke to him over the telephone.
Kampani told him that he was in no way involved with the matter, having resigned as a non-executive director in 1999. He responded to all the questions from the police officer and assured him that he would fully cooperate with the investigations on his return to India. After this, the police officer asked whether he could see Kampani's chamber. The police officer left after the company agreed to the request.
The statement also said the allegations that Kampani was an absconder were false and unfounded and that he was in no way involved in the alleged default offences committed by Nagarjuna Finance because he has had no connection with the company after his resignation in 1999.
Independent observers said the action against Kampani did not make any sense as Nagarjuna Finance's annual reports in 1999 and 2000 quoted the auditors as saying that the company's fixed deposits were fully serviced.
Subscribe to:
Posts (Atom)
