India's Hyderabad city hurts from Satyam scandal

Fri Jan 9, 2009 9:06am EST
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By Rina Chandran

MUMBAI (Reuters) - In India's biggest corporate scandal in memory, the city of Hyderabad has achieved what it has long yearned for: clamorous media attention and recognition.

Once touted as a rival to Bangalore, for long the first choice of local and foreign software firms, Hyderabad never quite achieved the fame of a Bangalore or Mumbai despite its efforts.

For the 400-year old city, where crumbling mosques and minarets sit amicably by the side of gleaming malls and gated communities, Satyam Computer Services was a showpiece company with which the state lured other local and foreign firms.

Its former chairman Ramalinga Raju, who on Wednesday admitted to inflating profits for several years, was regarded as a true son of Andhra Pradesh state, and called the "Narayana Murthy of Hyderabad," in a reference to the well-regarded founder of larger rival Infosys Technologies.

Now, the "pride of Andhra Pradesh has been hurt," local newspapers rued, its reputation damaged by "India's Enron."

"Hyderabadis are taking it very personally," said R. Prasad, a software engineer at a multinational firm in the city.

"Everyone was very proud of Satyam and of Raju."

Raju was regarded as a close ally of former chief minister Chandrababu Naidu, who is credited with the vision of attracting investors and transforming Hyderabad into "Cyberabad" to rival Bangalore, considered the Silicon Valley of India.   Continued...