IDnN16287370 The scandal has hit Indian stocks

Also on Tuesday, police collected documents from theHyderabad offices of PricewaterhouseCoopers, Satyam's auditors,while, separately, a three-member board appointed by thegovernment began its search for a new auditor for Satyam. Satyam, which specialises in business software, is battlingfor survival after its founder and chairman, 54-year-oldRamalinga Raju, quit last week and confessed the company'sprofits had been falsified for years. The Reserve Bank of india has sought details of banks'exposures to Satyam and other firms run by the founding family,including Maytas (Satyam spelled backwards) companies. Banking sources saying the focus was on property-relatedloans. Raju came under close scrutiny last month after thecompany's botched attempt to buy two construction companiespartly owned by its founders. ID:nN16287370 The scandal has hit Indian stocks .BSESN and the currency,as investors worried over the damage to foreign investment inAsia's third-largest economy and the once-booming outsourcingsector, a magnet for thousands of young job seekers.

However, bigger rival Infosys Technologies (INFY.BO), whichbeat market forecasts on Tuesday with profit up one third, saidit has not been affected by Satyam's woes. ID:nBOM259894 Shares in Satyam, which counts Nestle (NESN.VX) and GeneralElectric (GE.N) among its clients, fell 9 percent on Tuesdayafter jumping 44 percent on Monday. Satyam has seen its market value dive to less than $450million from more than $7 billion six months ago. Ramalinga Raju and his brother, the firm's former chiefexecutive, have been charged with criminal conspiracy andforgery.

Both are being held in a Hyderabad jail, along withfinance director Vadlamani Srinivas. The Times of India quoted prison officers as saying thefounder was spending time alone in jail, reading Buddhist books. In an unprecedented move, the government dissolved Satyam'sboard last week, making use of special provisions in Indiancompany law, as it rushed to contain the fall-out. So, the message is quiteloud and clear that the government is serious about Satyam. Butwe have to give them time as they need to understand thingsfirst," Ambareesh Baliga, vice president at Karvy Stock Broking,said.