Raju's fraud admission sends shockwaves through India Inc.

The disclosure has sent Corporate India into deep shock and disbelief and the courageous few said this is the right time for implementing stricter corporate governance norms.

In a statement, National Association of Software and Service Companies or NASSCOM, the consortium that serves as the apex body of the Indian IT and BPO industry, said the massive accounting fraud committed by Raju is an instance of failure of corporate governance.

"While the law will take its course, this incident is particularly unfortunate as the Indian IT-BPO industry had set very high standards of ethics and corporate governance," NASSCOM said, adding that this is a standalone case of failure of such failure 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 and does not in any manner a reflection on the industry or Corporate India," it said, adding that it would cooperate with the existing Satyam board to reach out to their customers and employees and guide them through the difficult period of transition.

"NASSCOM advocates the highest standards of ethics for the industry and we will work with our membership to re-commit to maintaining the highest standards of governance and transparency," NASSCOM said.

"There has been a breakdown of corporate governance, especially over a period of time. There needs to be a lot of soul searching and regulations need to be put in place to make sure it doesn't happen again. I am worried because India's reputation in corporate governance has been impacted. I do not believe this has any impact on the IT industry itself. This is an overall corporate governance issue at a firm level. But in terms of improving corporate governance, I really don't believe that is a mandate of any association," said Ganesh Natarajan, chairman of NASSCOM.