Satyam Computers’ founder and CEO Ramalinga Raju had resigned from his position with confessions on his blatant lies about his company’s performance. In his resignation letter he has admitted that the balance sheet carried inflated figures from year on year. The company had hit the international headlines last year as providers of information technology services for the World Cup 2010 and 2014. He also admitted that he had been doctoring the accounts for several years.
Raju in his five page resignation letter said that he manipulated the balance sheet to magnify non-existent figures to the tune of $99mn. In a shocking revelation, he further added, the company had $20mn worth of understated liability as of September 30. He also disclosed that he tried to fill fictitious assets to go ahead with the Maytas deal. The company’s shares have seen severe beating ever since the company board pushed through a decision to buy out two subsidiaries belonging to the promoter’s family.
Though, the Satyam board had later reversed Maytas deal following strong opposition from investors and shareholders, the latest revelation by one of the prominent figures of Indian IT will not only cause damage to his company but expected to spread across the IT spectrum.
Shares of Satyam were down by 70 percent on the BSE in intra-day trading and it is still falling. The observers are completely clueless about the price level of stabilization of this share. Satyam is a Nifty 30 company and it is also listed at several international stock exchanges including the New York Stock Exchange.
Surprisingly, no board member seems to be aware of the contents of the accounts until now. Ram Maynampati will act as the interim CEO until the company decides on a suitable replacement. Sridharan Ramakrishnan, Senior Editor of Economic times said there should be accountability from the auditors as to how it went unnoticed for many years. C.B. Bhave, chairman of SEBI said that they would co-ordinate with the Ministry of Corporate Affairs to take immediate action.