B. Ramalinga Raju, chairman and chief executive of Satyam Computer Services, resigned yesterday after admitting he had manipulated the accounts for “several” years to show hugely inflated profits and fictitious assets. The fraud is India's biggest corporate scandal since the early 1990s and its first high- profile casualty since the start of the global financial crisis.

Its disclosure will ring alarm bells for hundreds of Fortune 500 companies across the world that entrust their most critical data and computer systems to Indian outsourcing companies and threatens to damage the country's reputation as a place to do business. Satyam's clients ranged from Unilever and Nestlé to Cisco, GE, Sony and, until recently, the World Bank.

The scandal will also raise questions over how outsourcing companies are regulated and audited around the world. Satyam was audited by PwC and was the first Indian company to list on three international stock exchanges – Mumbai, New York and Amsterdam – yet the fraud went unnoticed for years.