Satyam and the corporate scam!

B. Ramalinga Raju, Chairman of Satyam Computer Serveces has admitted today of huge accounting frauds in Satyam. In a letter addressed to the board of directors, he admits that the accounting books were inflated to show higher operating income and profits than the actual. He admits that, what started as a minor gap between actual and shown, the gap consistently widened as the company grew and now it has become unmanageable! NY Times article can be found here.
This revelation comes at a time, when Indian IT industry is already facing heat of the global slowdown. Now, in light of this revelation, it can have negative repercussion on the Indian IT industry as a whole as the customers, esp those coming from a financial domain. will rethink and will investigate in the innards of the outsourcing provider before committing on a deal. This will and should also spark an investigation and overhaul of corporate governance and accounting practices at other Indian IT giants.
B.Ramalinga Raju has resigned from his post, which is mentioned in the same letter. Infosys founder, Narayan Murthy has lamented on this situation and has attributed failure of governance to this sad situation. He has always been an advocate of corporate governance.

Satyam was already under close scrutiny after it was banned by World Bank from all future contracts last October after World Bank found that spy software was installed on some desktops in its Washington headquarters.

Updates
On Bloomberg
On Wall Street Journal

India's Union Commerce Minister, Kamal Nath has commented that Indian Government will not take over Satyam. His comments can be found here. Securities and Exchange board of Indian (SEBI) also said that it was horrified after the findings and is in touch with Ministry of Corporate Affairs for coordinated action. NASSCOM also commented that this is failure of corporate governance.
The apex chartered accountants’ body ICAI will seek an immediate explanation from Satyam Computer’s auditors, PriceWaterHouse Cooper (PwC), on the financial fraud unearthed by the software company’s chairman B Ramalinga Raju, before taking any action.