Some of the biggest outsourcing firms such as Wipro and HCL Technologies, besides Satyam Computer, indeed, started off as family-run businesses. But many including Wipro, where its chairman Azim Premji controls about 80 per cent stake and whose son Rishad Premji was recently inducted as an employee, pride themselves as professionally-run. Premji was not available for comment.

Now, investors are demanding that outsourcing firms demonstrate tighter governance by hiring known auditors and a credible board of directors. “Investors are asking whether, in this environment, Infosys can afford to have a relatively-obscure firm perform the critical confidence-building function of the independent auditor,” asked Thadani of Gilford Securities, “Or, could Cognizant Technologies’ remarkable track record also prove too good to be true?”

Outsourcing is a high-growth sector in India’s until-recently buoyant economy, not just bringing in much-needed foreign earnings but also employing millions. Satyam, for instance, has close to 60,000 employees while its larger rivals are closing in on the 100,000 employee mark.

Indian outsourcing companies perform a complexity of tasks for the biggest global corporations from mundane payroll, accounting and supply chain management, to the more visible customer service and even highly sensitive services such as R&D and design. India is the indisputable number one outsourcing destination for Western multinationals looking to offshore their operations.

Such customers, virtually a list of the top global corporations, will feel a heightened level of concern and “ask more and more questions and demand more and more due diligence,” said Infosys chairman and chief mentor N R Narayana Murthy.

... contd.