SATYAM SCANDAL
“Satyam’, the name itself means truth. However, today they had lost the meaning of this word. Satyam was one of the India’s fourth largest IT firm and a leading outsourcing company ever in India. Now, they are facing a lot of problems. At the end of the second quarter of 2008-09, this company listed its assets as 53.6 billion rupees in cash and bank deposits. The problems began, when CEO Ramalinga Raju of Sathyam computers gave a letter to the board of that company in which he admitted that 50.4 billion rupees or US1.03 billion did not exist in these assets. He also admitted that he showed extra profits and he had created a lot of black money. He had also says that Maytas acquisition deal was the last attempt to fill the gap between the assets, but it was also failed. Ramalinga Raju resigned from his position after creating a fraud history. He was arrested by Andhra Pradesh police and registered a case against him based on his confessional letter to the Satyam board and SEBI. Raju’s revelation creates a great shock to all Indian share market investors and Satyam’s shares fell nearly 80 per cent quickly in India and dragged down Bombay’s main benchmark index 7.3 per cent. It is one of the biggest frauds that Indian capital market had ever seen. The investors worried that this scandal causes great damage to foreign investment in Asia’s third-largest economy and the once-booming outsourcing sector, a magnet for thousands of young job seekers. Asia’s largest company Sathyam serves almost 700 companies, including 185 Fortune 500 companies, and generates more than half its revenues from the United States. This big company contains 53,000 employees and operates in 65 countries. The New York Stock Exchange has halted trading in Satyam stock as of 7 January 2009 and India’s National stock Exchange has announced that it will remove Satyam from its S&P CNX Nifty 50-share index on January 12 due to this scandal. In Sanskrit, Satyam means “the truth”. But this company certainly failed to keep the meaning of that word. All the problems had occurred when company decided to buy “truth spelt backwards” company named Maytas.
SATYAM COMPUTER SERVICES
‘Satyam’ Company was founded by Ramalinga Raju in 1987 and its headquarters is at Hyderabad, India. Satyam offers a variety of IT services to many different types of businesses. This Asia’s largest company serves almost 700 companies, including 185 Fortune 500 companies and the company employs over 53,000 IT professionals. Satyam also has development centers in USA and in Europe. Now, the former CEO Raju’s fraud towards the company brings shock to all investors in the world and this shocking news very effected in Indian economy. After that fraud, the Government reconstituted the entire board with some heavyweights like Kiran Karnik, Deepak Parekh and C Achuthan becoming directors and new auditors have been appointed. From their leadership, the company should recover from this crisis very soon. Satyam MD Raju had beaten American president Obama in net popularity charts taken last day. All the leading newspapers have been in a contest of writing the scandals of Satyam and predicting its future. So no wonder Raju hitting the charts in web popularity. He has been emerged as the India’s biggest ever corporate fraud. All the share holders are withdrawing their part from Satyam.