An independent investigation by FE reveals that several of Satyam’s much-touted 185 Fortune 500 clients have begun voting with their feet—by reviewing, closely monitoring and devising contingency plans for their existing relationships with Satyam, or simply refusing to include the firm in vendor consolidation plans. They include Coca-Cola, Telstra, Nestlé, British Petroleum and Cigna.

Members of the new board, which assumed charge on January 11, have been voicing optimism about the disposition of clients towards Satyam’s troubles, even asserting that they would use their personal networks and friendships to garner new business. While the members have admitted that two “reasonably large customers” have quit, the only client whose exit has been corroborated so far is Bloomington, Illinois-based State Farm Insurance. “Nobody in Satyam seems to know who the other client is,” the firm’s spokesperson told FE.

When the board emerged from a two-day meeting on January 23, board member Kiran Karnik said, “There is a pronounced shift in customer attitudes—from being alarmed in the initial days, it has changed to a sense of cautious optimism.” The board meeting’s outcomes as intimated to the New York Stock Exchange did not mention any specific clients exiting, but noted euphemistically: “Customer attrition is being closely monitored at the board level and the board confirmed that it has seen no material impact so far.”

Whether other big-ticket clients have already exited or are on their way out, their actions should be a significant factor for the six firms in the reckoning to take over Satyam, as revealed by another board member, Tarun Das, on Thursday. An exodus by Satyam’s key clients could jeopardise the firm’s valuation.

Larsen & Toubro, which has raised its stake in Satyam from 4% a month ago to 12%, has seen its stock price tumble by over 22% since it indicated an intent to buy the IT firm on January 7, the day Raju confessed. L&T closed on the BSE at Rs 660.30 on Thursday, down from its January 6 closing price of Rs 848.55.

Australian telecom and media company Telstra, ranked 448 on the Fortune 500 list, confirmed to FE that it is undertaking a consolidation exercise to reduce its IT vendors from the current four to two. Major application, development and maintenance contracts, spread across four major suppliers—EDS, IBM, Infosys and Satyam—are up for renewal.

“We expect to finalise our new arrangements early this year and, obviously, will take the current issues into account,” said Telstra spokesperson Martin Barr. FE learns that Telstra has already invited pitches for its consolidation plans, but Satyam has not been invited.

Satyam bagged Telstra’s business in 2004 with a reported contract size of around $100 million, with 130 employees working out of a dedicated centre in Bangalore.

Vevey, Switzerland-headquartered Nestlé, ranked 57 on the Fortune 500 list, also told FE that “alternative solutions are being considered” even though Satyam “has guaranteed Nestlé the normal continuation of their services”. Company spokesperson Ferhad Soygenis said, “Nestlé’s own internal resources are in a position to provide the company with the necessary IT support.”

Satyam’s association with Nestlé goes back to 2004. A three-year contract was renewed in 2007 for another three years for a consideration of Rs 300 crore and around 500 Satyam employees are reportedly working on the account.

Coca-Cola spokesperson Crystal Warwell Walker said that his company works with various IT vendors, including Satyam. “We are assessing (Satyam’s) situation and will determine our next steps after the review is complete,” he said.

Some of Satyam’s other Fortune 500 clients, including British Petroleum and health insurance company Cigna told FE they are monitoring the situation closely. Cigna, which has a six-year relationship with Satyam, said it has detailed contingency plans so that “regardless of what happens with any of our vendors, processes are in place that are designed to ensure that our customers continue to receive… service from Cigna.”

Among its clients, GE and Cisco are among the few that have gone on record in support of Satyam. While uncertainty looms over a majority of its contracts that are up for renewal (industry estimates peg their value at $350-$500 million), the company is also being kept out of vendor consolidation exercises currently underway in view of the global financial crisis.