BANGALORE, INDIA: The startling confession made by Satyam Computer Services chairman Ramalinga Raju that there were financial irregularities in the organization has sent shock waves along the spine of the Indian corporates and trade bodies.

Expressing shock over the disclosures made by Ramalinga Raju, NASSCOM said this incident is particularly unfortunate as the Indian IT-BPO industry had set very high standards of ethics and corporate governance.

"This is a stand-alone case of failure of corporate governance and it is critical that it be viewed in this light. We are sure that all the stakeholders would also treat this as an isolated issue. This is not in any manner a reflection on the industry or corporate India. We will ensure that customers and other stakeholders get the right perspective," Nasscom said in a statement.

Saying that there is a need for a fundamental and deep examination of what went wrong, Rajeev Chandrashekar, president, FICCI, said, "I don't think it is overstating the case at all. What happened following Enron in the US is bound to happen here. There is definitely a need for deeper and harder look at what we have been calling corporate governance over the last few years."

Responding to the development, Kapil Dev Singh, Country Manager, IDC India said: "It will make every stakeholder - investor, customer and employee - demand inviolable corporate governance policies and even more stringent enforcement mechanism."

He add that the term 'business ethics' has never been so badly abused in India as this incident.

Deploring the entire incident, Infosys said the government and regulators must investigate the matter to get to the bottom of this.

"They should also make necessary changes to regulations so that such incidents do not happen in future," said an Infosys Spokesperson.

Observing that a detailed investigation of this incident is urgently called for and needs to be undertaken by the authorities without delay, Wipro said it strongly condemned any attempt to mislead stakeholders.

"Global standards of corporate transparency are very high and we are confident that this is an isolated case and not representative of the IT industry," said Suresh Senapaty, executive director and CFO, Wipro Limited.

However, Cisco preferred not to make any open comment on the incident.

"The recent unfortunate developments unfolding at Satyam are not expected to have any material impact for Cisco. At this point, we would not like to comment further and have full confidence in the government and regulatory authorities to address this matter as appropriate," said Varghese Thomas, head – corporate communications, India and SAARC, Cisco.

Meanwhile, terming the Satyam Computer financial fraud as "mind-boggling", Andhra Pradesh Chief Minister Y S Rajasekhara Reddy said his government would order an inquiry into the "fudging" of accounts and do "whatever is needed to be done".

"We will ask the CB-CID to hold an immediate preliminary inquiry to look at the criminal angle into the entire episode," he said.

The Chief Minister said that he would also ask his officials to look into various problems and issues concerning this episode.