Sunday, February 1, 2009

Satyam Saga

January 7 2009 was a shocking day not only in India, but also across the world, when Ramalinga Raju admitted cooking account books and a fraud of 8000 crore Indian rupees. It was the country's biggest corporate fraud involving about Rs 8,000 crore, Satyam was hurtling towards disaster, following the shocking disclosure of accounts fudging by its founder Ramalinga Raju, who then quit as chairman - leaving an uncertain future for the company and its 53,000 employees.

Certain questions rise on reading his letter to SEBI and the board of directors. He had said "That neither myself, nor the Managing Director (including our spouses) sold any shares in the last eight years -- excepting for a small proportion declared and sold for philanthropic purpose" and "hat neither me, nor the Managing Director took even one rupee/dollar from the company and have not benefitted in financial terms on account of the inflated results". If this is what actually happened, then why to fudge the books and show profits in the market. But reports show that Raju created 300 companies to divert funds.  According to the government, Satyam Computer Services’ founder Ramalinga Raju created a network of about 300 companies and diverted funds from one company to another in a complex but carefully planned process. There has been an issue of siphoning of funds. The investors money where siphoned and they where cheated. Investigation showed that the company really employed only 44000 employees and the employee’s salary account were used to siphon the funds.