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State Farm terminates deal with Indian company involved in scandal(The Pantagraph (Bloomington, IL) Via Acquire Media NewsEdge) Jan. 17--BLOOMINGTON -- State Farm Insurance Cos. has severed its relationship with an India-based company involved in an accounting fraud scandal. The insurance giant said Friday that it has cancelled its contract with Satyam Computer Services, a global information technology firm. About 400 Satyam employees working at State Farm will lose their jobs. "The current uncertainties surrounding Satyam's future and potential impact to State Farm resulted in this decision," the company said in a statement. In India, the company's founder has admitted to falsifying Satyam's accounting records for years, including $1 billion in fake deposits. Several Satyam executives have been arrested on charges in connection with the scandal. At State Farm, the Satyam employees work on short- and long-term IT projects. The contract was terminated Thursday, but many employees will remain for a short period to assist in the transition. "There's a lot of angst about these people because they are friends and co-workers," State Farm spokesman Jeff McCollum said. "These people didn't do anything wrong. It's just very unfortunate." According to the company's Web site, Satyam has nearly 53,000 employees that work in more than 65 countries, and 185 Fortune 500 clients. Satyam has been a "long-time" vendor for State Farm, and is one of several vendors the insurance company uses for this type of IT work, McCollum said. The company is taking steps to ensure a smooth transition for the projects Satyam employees were involved in, he added. McCollum said it's possible that some of the Satyam employees, who obtain visas to work in the U.S., "under certain circumstances, after the right requirements have been met," could end up obtaining new employment with another State Farm vendor. To see more of The Pantagraph, or to subscribe to the newspaper, go to http://www.pantagraph.com. Copyright (c) 2009, The Pantagraph, Bloomington, Ill. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |