satyam scam
Satyam Scam – Indian Corporate Fraud
THE SATYAM SCAM…
(RAJU NOT THE GENTLEMAN)
India’s Enron , the biggest corporate fraud of Indian History
The recent disclosure by the chairman of Satyam Computers, Ramalinga Raju uncovered the biggest corporate fraud of India which by some has been regarded as similar to Enron. The letter sent by Raju to the board of Satyam ,regulator, exchanges shocked the whole country and company’ s share at the exchanges hitted a life low of 30 from the intraday high of around 180, down almost 80%. All this raised many questions on the role of Auditors (PricewaterhouseCoopers).
Copy of the letter written by B.Ramalinga Raju
To the Board of Directors
Satyam Computer Services Ltd,
From B. Ramalinga Raju
Chairman, Satyam Computer Services Ltd.
January 7, 2009
Dear Board Members,
It is with deep regret, and tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice;
1. The Balance Sheet carries as of September 30, 2008
a. Inflated (non-existent) cash and bank balances of Rs.5,040 crore (as against Rs. 5361 crore reflected in the books)
b. An accrued interest of Rs. 376 crore which is non-existent
c. An understated liability of Rs. 1,230 crore on account of funds arranged by me
d. An over stated debtors position of Rs. 490 crore (as against Rs. 2651 reflected in the books)
2. For the September quarter (Q2) we reported a revenue of Rs.2,700 crore and an operating margin of Rs, 649 crore (24% Of revenues) as against the actual revenues of Rs. 2,112 crore and an actual operating margin of Rs. 61 Crore ( 3% of revenues). This has resulted in artificial cash and bank balances going up by Rs, 588 crore in Q2 alone.
The gap in the Balance Sheet has arisen purely on account of inflated profits over a period of last several years (limited only to Satyam standalone, books of subsidiaries reflecting true performance). What started as a marginal gap between
THE SATYAM SCAM…
(RAJU NOT THE GENTLEMAN)
India’s Enron , the biggest corporate fraud of Indian History
The recent disclosure by the chairman of Satyam Computers, Ramalinga Raju uncovered the biggest corporate fraud of India which by some has been regarded as similar to Enron. The letter sent by Raju to the board of Satyam ,regulator, exchanges shocked the whole country and company’ s share at the exchanges hitted a life low of 30 from the intraday high of around 180, down almost 80%. All this raised many questions on the role of Auditors (PricewaterhouseCoopers).
Copy of the letter written by B.Ramalinga Raju
To the Board of Directors
Satyam Computer Services Ltd,
From B. Ramalinga Raju
Chairman, Satyam Computer Services Ltd.
January 7, 2009
Dear Board Members,
It is with deep regret, and tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice;
1. The Balance Sheet carries as of September 30, 2008
a. Inflated (non-existent) cash and bank balances of Rs.5,040 crore (as against Rs. 5361 crore reflected in the books)
b. An accrued interest of Rs. 376 crore which is non-existent
c. An understated liability of Rs. 1,230 crore on account of funds arranged by me
d. An over stated debtors position of Rs. 490 crore (as against Rs. 2651 reflected in the books)
2. For the September quarter (Q2) we reported a revenue of Rs.2,700 crore and an operating margin of Rs, 649 crore (24% Of revenues) as against the actual revenues of Rs. 2,112 crore and an actual operating margin of Rs. 61 Crore ( 3% of revenues). This has resulted in artificial cash and bank balances going up by Rs, 588 crore in Q2 alone.
The gap in the Balance Sheet has arisen purely on account of inflated profits over a period of last several years (limited only to Satyam standalone, books of subsidiaries reflecting true performance). What started as a marginal gap between