Satyam Chairman Resigns After Falsifying Accounts, Shares Fall

>> Wednesday, January 7, 2009

Satyam is a big fraud now every one knows. In fact I should say Raju is a big fraud.

Satyam Computer Services Ltd. Chairman Ramalinga Raju resigned after announcing the company had falsified accounts and assets, sending shares of the Indian software-services provider tumbling in Mumbai.

Satyam had 50.4 billion rupees ($1.04 billion) of “inflated” cash on its balance sheet at the end of Sept. 30, the Hyderabad-based company said in a release today. Raju, 53, unsuccessfully tried to sell two companies last month to Satyam in the “last attempt to fill the fictitious assets with real ones,” Hyderabad-based Satyam said in a statement sent to the Bombay Stock Exchange, citing the chairman.

Satyam shares tumbled a record 37 percent as of 11:34 a.m. in Mumbai trading. Raju, the founder and chairman, on Dec. 16 announced a $1.6 billion takeover of the two companies owned by his family, only to drop the deal hours later after stockholders protested. Separately, the World Bank Dec. 23 declared India’s fourth-biggest software-services provider ineligible for contracts for eight years, alleging ‘improper” benefits were given to the bank’s employees.

Raju scrapped the planned acquisition of Maytas Properties Ltd. and Maytas Infra Ltd., less than 12 hours after announcing it. Investors dumped the stock, causing a 31 percent slide, amid questions over Satyam’s decision to spend cash to buy unrelated businesses during the economic slump.- Bloomberg.