How much this will affect technology outsourcing decisions by Western nations is beyond my ability to predict, but a financial scandal involving one of the largest Indian outsourcing services provider has roiled that nation's equity markets and forced the company's founder to resign in disgrace.

From Reuters via internetnews.com:

The head of Indian outsourcing firm Satyam Computer Services resigned on Wednesday, disclosing that profits had been falsely inflated for years and sending its shares tumbling nearly 80 percent.

India's biggest corporate scandal in memory threatens future foreign investment flows into Asia's third-largest economy and casts a cloud over growth in its once-booming outsourcing sector.

The news sent Indian equity markets into a tailspin, with Bombay's main benchmark index tumbling 7.3 percent in a firmer session for world markets and the Indian rupee fell.

Ramalinga Raju, founder and chairman of India's fourth-largest software services exporter, said in a statement that Satyam's profits had been massively inflated over recent years but no other board member was aware of the financial irregularities.

Nice to know that non-existent board oversight isn't a uniquely American corporate trait.

The case already is being referred to as India's "Enron." One immediate consequence is that Merrill Lynch has cut its ties with Satyam, which specializes in business software and back-office services (and, apparently, fraud). Among its clients are General Electric and Nestle.

I have to believe that the thousands of U.S. IT workers whose jobs have migrated to India in recent years are experiencing some intense schadenfreude right about now. I blame them not one bit.