Does India have an Enron in waiting?

Satyam may have avoided becoming India’s Enron but there could be another fraud around the corner.

The Satyam scandal that hit the outsourcing industry might not be the last, according to the Asian Corporate Governance Association (ACGA) in Hong Kong.

The independent organisation has published a white paper and it claims that corporate India is open to a repeat of the billion dollar fraud committed by Satyam chairman B. Ramalinga Raju.

See the full ACGA report here.

The report is 55 pages and have not gone through it all but appears there are major questions regarding corporate governance in India. The fact that directors are the owners seems a problem as well as the companies that audit these firms not being appropriate.

The website the quotes one of the reports authors Sharmila Gopinathas saying “To think there aren’t other companies [other than Satyam] that dabble in less than forthright practices, to believe that other companies are not doing this kind of thing is naive.”

Is there reason for UK corporates to think twice about outsourcing to India?

The Satyam fraud could have left companies that outsourced to the company high and dry if it had collapsed.

What does the industry think?