Satyam no longer a top-tier Indian service provider, says analyst

Danger that the financial reporting delay could cause de-listing from stock exchange

Ramalinga Raju admitted overstating Satyam's profits

Following recent senior staff moves, and the further postponement of its financial results report, India-based IT services provider Satyam has dropped out of the top tier of Indian service providers, according to Ian Marriott, research vice president at Gartner.

Marriott suggested that senior staff were leaving and reappearing at competitor companies as a result of Satyam losing its market position. "They've dropped out of the top tier of Indian service providers. The top six is now talked about as a top five," he said.

In addition, the company is losing clients as a result of delays in posting its financials, according to Marriott. The company recently announced that it would postpone its financial reporting for a further three months – it has not reported since December 2008.

This delay is beginning to cause significant problems for the company, he argues: "Satyam's customer base has started to erode. [But] it has managed to extend some existing deals, meaning the quality of service is still at least adequate. The company is eager to keep key accounts so is offering good deals. "

Manish Mehta – the most recent senior staff member to leave the company, where he worked as chief delivery officer – will move to Capgemini.

This follows a spate of recent high-profile exits from the company following last year's fraud case, where its founder, B Ramalinga Raju, admitted to falsifying company accounts.

Senior vice president Keshab Panda resigned in August last year, following other senior-level resignations including Subu D Subramanian, head of the automotive group; Deepak Nangia, company head, Australia; Naresh Jhangiani, global head, Satyam BPO and Ravi Bommakanti, delivery head, US.

Mahindra Satyam, which is listed on the New York Stock Exchange, has not published its accounts since the Raju scandal broke. The Indian Company Law Board recently granted a third extension of the deadline to show results from December 2008 to 30 September 2010.

"There is a very real danger that they'll be de-listed if they don't post accounts by October," said Marriott. This could cause customer confidence to be weakened further." he added.

Indian-based telco Tech Mahindra, which owns a controlling stake in the company, were not available for comment.