Fraud in Satyam Computer Services Limited

India’s fourth Information Technology Firm Satyam Computer Services Limited based in Hyderabad yesterday shake the Country with India’s biggest corporate fraud of 7000 Rupees Crores when it came to light and B Ramalinga Raju founder and chairman of Satyam Computer Services Limited, who is alongwith his family hold 3.06 percentage of shares in the company, resign by accepting irregularities in the balance sheet of company from years by way of showing false profits , it will not only taint on to the image of Indian companies but will also effect negatively to investment community as in yesterday itself in single day trading its shares dip almost 80 percent it open on 7th Jan,09 at 179.10 and touch the high 188.70 and low of 30.70 during the days trading and close at 39.95 paisa, and investor lost Crores of rupees in a day of trading.B.raju said that he is ready to face any lawsuits and apology from its employees and share holder by accepting responsibility in irregularities. B.raju is also accused to help his sons companies with Satyam money. Recently Satyam purchase two production companies and Maytas in which his son has major share with this takeover process begin of exposing in Satyam irregularities. As per experts it was not logic by a B.P.O and software Company to purchase Maytas who is in the totally different field. Even sometime recently World Bank also ending its deal with Satyam and announced ban on doing business with Satyam, resultant despite being in the group of elite Fortune-500 and listed in New York Stock Exchange this tarnishes the image of Satyam but it was still honour by Indian software companies’ top organization Nasscom .Nasscom said despite fraud Satyam’s membership will continue and said there top priority and worry is not Satyam but to get the faith of investors in Satyam and further add that situation rises because of fraud, organization will help Satyam work force to get solution. Indian Government hand over this case to Serious fraud investigation Office ( SFIO) and while expressing his reaction Minister of Company affairs Mr.Premchand Gupta said there was no need for Central Government to get permission from SEBI and if accusation proves against company strong action will be taken. State Government Andra Pradesh said B.raju can be arrested. On Satyam chances are that as it is listed in New York Stock Exchange also can face legal action in America also, investment Bank Merrill Lynch break its tie with Satyam despite B.Raju support Merrill Lynch to take over Satyam. Its believe that after coming in light the fraud ,from Satyam Computer prestigious Golden Peacock Award which it get from Aaj Tak can also be stripped off.
Detail of fraud and how it takes place:-
• In the words of B.Raju ‘on 30 September in the balance sheet of Company shown 5,040 Crores rupees, in it cash was shown falsely which infect was not in reality and also shown in bank Balance. It was 5,361 Crores in Companies accounts.
• In Balance sheet 376 Crores of rupees was added as interest, which was a false figure. Almost 1,230 Crores of rupees was added as company liability, figure was more then 4,90 Crores of rupees. and in accounts it was shown 2,651 Crores of Rupees.
• In the Quarter of September Satyam shown 2,700 Crores of rupees as income, in it operating margin was 6,49 Crores of rupees, infect company earn 2,112 Crores, and 61 Crores was margin Money.
• In the July quarter itself companies balance sheet was increased 5,88 Crores of rupees in cash and bank balance falsely.
• This difference in balance sheet was become because of presenting profit falsely from past few years. In original account present amount and between false account difference increases year by year. To prove its correct company adds additional assets and properties.
With the irregularities by One person Mr.B.R.Raju as he accepted it will effect directly and indirectly linked with this company countless other persons like its employees which will effected directly, then its share holders, then investment banker and finical institutions who lend money, above all it will earn very bad name in the mindset of international community who want to involve with India in the scenario of globalization and will shake developing Country India badly .