SAY it ain't so, Satyam.

Shares of Indian IT outsourcing giant Satyam Computer Services (NYSE:SAY) got pummeled this morning, after Chairman B. Ramalinga Raju admitted that the company's books are cooked.

It's not pretty. Satyam's balance sheet cash is inflated by the rupees equivalent of more than $1 billion, as the result of several years of inflated profits.

"It was like riding a tiger, not knowing how to get off without being eaten," Raju confesses in a note to the company's board, presumably unaware of the chairman's number-crunching trickery. Fearing that the gaps would become public under a buyout -- and the stock had risen yesterday on newspaper reports that it was an acquisition target -- Raju came clean.

Investors knew that something wasn't quite right with Raju. The stock took a spill last month when Raju announced the proposed $1.6 billion purchase of distressed assets. The problem? The targeted Maytas Properties buy consisted of businesses owned by the chairman's sons, and completely unrelated to Satyam's outsourcing stronghold.

"How would shareholders have known whether Satyam was simply bailing out family members by sorely overpaying for these assets?" I asked at the time.

It turns out that it was actually the sons trying to bail out Raju.

"The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones," he confesses.

The crushing Satyam news is having a favorable impact on its rivals. Cognizant Technology (NASDAQ:CTSH) and Infosys (NASDAQ:INFY) are moving higher today, while Wipro (NYSE:WIT) is only trading marginally lower. Rather than focus on the lack of market credibility in India-based companies, savvy investors realize that incensed Satyam customers are likely to head elsewhere for their IT outsourcing needs.

Other Indian-based growth stocks, like online access specialist Sify (NASDAQ:SIFY) and new media player Rediff.com (NASDAQ:REDF), are trading all over the map.  

In the critically acclaimed Slumdog Millionaire, the Indian protagonist surprises a quiz show host by knowing all of the right answers. As it turns out, the correct responses typically come from heart-wrenching episodes in his life. Satyam has it the other way around, with investors getting poorer as Raju provides all of the wrong answers.

He is naturally stepping down, ready to face his fate. Satyam will likely settle for a bargain-priced buyout from someone -- anyone -- willing to take a chance on the mystery box of a company that Satyam has become.

"It is written," is how Slumdog Millionaire ends, before breaking into an uplifting Bollywood dance sequence at a train station. Satyam's ending now appears to be more of a train wreck instead.

The painful Satyam saga:

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Longtime Fool contributor Rick Munarriz relishes unearthing promising growth stocks overseas. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.