satyam chief admits fraud: Raju resigns and admits incorrect balance sheet
07 January, 2009
In a shocking development, Ramalinga Raju of Satyam has resigned from the Chairmanship of Satyam. What is more shocking is that he has revealed about the incorrect details in the Balance sheet of Satyam, which is having inflated values of almost 5040 Crore Rupees. This has come as a big shock to the entire world. Satyam is one of the big IT companies of India and has been sensing some trouobles since last few weeks.
Initially, it was the Maytas Infrastructure deal which was alleged to have all inconsistencies and beign favourable to the family members of Raju. Then the World bank created another uproar by charging Satyam of data theft. And now, the resignation and revelations by Ramalinga Raju seems to be the last nail in the coffin, informing about inconsistencies in the balance sheet of Satyam talking of inflated cash and bank balances.
Till yesterday, there were rumors about a possible Satyam-Tech Mahindra Merger, but the latest news of today will make it more difficult for Satyam. There were issues of Corporate Governance overlooking, and even relationships between Indian School of Business ISB and Satyam have come under the scanner of SEBI and other regulatory authories. Let's hope that something worthwhile comes out of all this unfortunate development. There will be severe implications of all these revelations for other Indian Stock listed companies as well. Worst situation is of the shareholders which saw 20% decline in the Satyam Share price in less than 10 minutes of Raju's resignation news.
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