India moves to contain Satyam fraud fallout

The $1 billion fraud unearthed last week at a leading Indian outsourcing firm has spawned fears it could tarnish the image of India overseas as an outsourcing powerhouse, thus impeding business prospects.

Two days after B. Ramalinga Raju and his brother Rama Raju were taken into judicial custody for orchestrating the fraud, labeled widely as "India's Enron," the Indian government, in damage-control mode, swooped in to take control of Satyam, the beleaguered outsourcing company they cofounded. On Sunday, it appointed three leading businessmen to the board of Satyam Computer Services Ltd.

Last week, Mr. Ramalinga Raju admitted to concocting key financial results of Satyam Computer Services Ltd. "for years," while vastly overstating revenues and bank balances.