Will Satyam Computers go bankrupt? Raju resigns

P

Satyam's own Ramalinga Raju resigned and admitted that he had committed fraud and cash books of Satyam were inflated.

The Satyam balance sheet, as on September 30, 2008, had an accrued interest of Rs 376 crore (Rs 3.76 billion) which is non-existent. It also had an understated liability of Rs 1,230 crore (Rs 12.30 billion) on account of funds arranged by Ramalinga Raju. The balance sheet showed an overstated debtors position of Rs 490 crore -- Rs 4.90 billion -- (as against Rs 2,651 crore -- Rs 26.51 billion -- reflected in books).

source : *economictimes.indiatimes.com/Satyam_Full_text_of_Rajus_letter_to_the_Board/articleshow/3946470.cms

This is really a shocking news .. meanwhile Satyam shares tumbled around 75%

ZOMG!
Satyam really IS dying. I heard HP is trying to buy it...

First the World Bank fiasco, then the Maytas deal, now fudging of bank accounts to show fake profits.

Forget lack of corporate governance, this will set a bad image for India in the Global Market as Satyam is a global enterprise.

and another company bites the dust

poor friends of mine who got placed in Satyam, dunno what will happen to them...[and not to mention those already working there

]

n6300 said:
and another company bites the dust

poor friends of mine who got placed in Satyam, dunno what will happen to them...[and not to mention those already working there ]

AFAIK, Satyam is not in facing bankruptcy.
The issues faced here are first of all the Maytas Deal, and inflating non existant profits.ie. cooking up false accounts of profits in the past few years.
So they will be held answerable to many, including regulators about this "fudging".

^ yeah but with all that liability and the other 'shady deals' n stuff will also not be good news for prospective buyers...

and if some biggie does go ahead, i'm not very sure about the future of its 50k+ employees...

ok i noticed it just now....

maytas is the reverse of SATYAM

[maytas is the company of the son of that Ramalinga Raju, AFAIK]

Earlier in AP, every second guy on the street claimed to know Ramalinga Raju personally (just like folks in Kerala claim to know Sreesanth). I wonder what they will say know.

Consulting firm PwC will become another Arthur Anderson once the dust settles down, take this from me.

A

holy crap man....

DSP Merill Lynch has ended its deal with Satyam..God save Satyam

i am really unsure that satyam will overcome from this issue and gain the confidence of investors again........!!!!
Really a bad news....

What will this effect on the indian IT industry...........??

Satyam case is a warning for other managements: N R Narayanamurthy

7 Jan 2009, 1444 hrs IST, ET Bureau

BANGALORE: At a time when India software Inc is waking up to perhaps the biggest corporate scam the country has seen, industry leaders such as N R
Narayanamurthy who founded country’s second biggest tech firm Infosys, described developments at Satyam as shocking, painful and a good warning for other companies in the sector.

The Satyam episode is a good warning signal for all managements, said Mr Narayanamurthy, the non-executive chairman of Infosys and one of the strongest votaries of corporate governance in the country. Speaking to ET , Mr Murthy said, it is time for authorities to step in with appropriate action.

Following is Mr Murthy’s unedited views on the subject.

I am shocked and painfully dismayed at what has happened at an important software company in India. It is a total failure of governance. I only hope that relevant authorities get to the bottom of this and take appropriate action.

It is important to remember that one Satyam does not make the entire Indian software industry. I believe it is an isolated case. I want foreign investors to realise that there are many honest managements and good companies in this country. While what has happened at Satyam is totally regrettable, I believe that it does not represent India. It just represents one individual and one company.

In the short term, investors will start looking deeper into all companies they want to invest in, and rightly so. Once they realise that things are not all that bad and that most companies are decent and managements honest, they will regain their faith.

This too will pass. Investors will consider this as an extreme case. Right now, all of us must conduct ourselves in the most legal and ethical manner. It is a good warning signal for all managements.

^^ Hey Murthy! Are you sure you don't have any skeletons in your closet!!!???

he he he *www.msgking.com/images/emoticons/smileys/smileys23.gif

R

god save those who still wanted him to be part of the management when the maytas deal was called off.

i feel the entire board directors will also have a responsibility and nobody who is part of the existing management should be allowed to remain. They cannot claim not to know of anything that is going on unless they are sleeping the whole time they are the directors of the company.

One big problem here is what the auditors were doing? if he himself admits fraud then the auditors are not doing their job whether intentionally or not.

Ok they said investigations will be done. I am pretty suspicious what will come out of it. This guy and others involved (i dont think only he is involved) should be punished severely with jail and fine of crores. The investor can sue him and others too.

India never punished the big fish involved in scams and frauds, they only can make an example of the small fry involved in the scam or fraud. I hope this time around they punished all the big fish

Here is the link to his resignation letter(.pdf) *ibnlive.in.com/pdf/RRaju-resignation-letter.pdf

I'm screwed...

R

you have the company stocks?..i wonder the guy and his family has shortsell (not have to be in satyam) in other people name to gain from the rolller coaster ride down

G

Not trying to act like an *** but this is quite funny indeed.

Stocks fell from rs 146 yesterday evening to Rs 33 today.

R

very soon enterprising film producer will try to make a film based on the whole saga

anybody wanting to take a bet then take it at 10 or below..(if you are gonna buy a lotto or gamble in casion) bet it on them but not a big amount.

Satyam stocks are getting Traded in good amounts, i wonder who is buying

, may one's who will buy large stocks to have a great stake in company, when it out goes for sale !!

I may be wrong dunno

That resignation letter is quite explainable ..but still lots of questions !!

++1 to dd_wingrider for posting the link

An honest question: Why Satyam showed fake profits???What was their motive

P

Some facts about SATYAM

*Employs 53,000 people, operates in 66 countries
*Won 2008 global award for excellence in corporate governance by World Council for Corporate Governance (WCFCG)
*Becomes official IT services provider for the FIFA World Cups, 2010 and 2014
*Ramalinga Raju, Satyam's founder and chairman, won Ernst & Young's 2007 entrepreneur of the year award

SOURCE *news.bbc.co.uk/2/hi/business/7815031.stm

zomg! shares that low ?
Am I glad I asked my dad to buy infosys not satyam... phew...

Too bad for shareholders

*s269.photobucket.com/albums/jj44/visio159/Unismilies/38large.png

It is really unfortunate that Satyam fudged its accounts, particularly when PWC was their auditor. ICAI has its work cut out. Come to think of it, I was with PWC for some time.

MetalheadGautham said:
zomg! shares that low ?
Am I glad I asked my dad to buy infosys not satyam... phew...

yes, u should be...Satyam out from NSE from 12th...

Kl@w-24 said:
I'm screwed...

Why? Or more importantly, how?

confused!! said:
An honest question: Why Satyam showed fake profits???What was their motive

It all boils down to greed or honesty. If you are honest, you may not get great results but atleast your are safe.
If you are greedy, well, need I explain?

MetalheadGautham said:
zomg! shares that low ?
Am I glad I asked my dad to buy infosys not satyam... phew...

Lucky you.

thewisecrab said:
Why? Or more importantly, how?

Long story. In short, I was selected in 2 companies. I ditched the other one (Tech Mahindra) for Satyam, waited for 6+ months and now I've got bugger-all to show for it.

G

Reading that 5 page letter gives me the shivers. Satyam has a net operating margin of just 3%?!? That is seriously thin.
I'm beginning to think there's a lot more to this than just the facts in the letter.

P.S.: Tough luck Kl@w-24. Keep your chin up man and hope for the best.
P.P.S.: You might want to start checking out job web sites like TimesJobs too, just to be on the safer side you know.

gforce23 said:
P.S.: Tough luck Kl@w-24. Keep your chin up man and hope for the best.
P.P.S.: You might want to start checking out job web sites like TimesJobs too, just to be on the safer side you know.

I've already registered at 3-4 job sites. And yeah, it's better that all of this has happened right at the beginning of my career when I've still got a few options

Kl@w-24 said:
Long story. In short, I was selected in 2 companies. I ditched the other one (Tech Mahindra) for Satyam, waited for 6+ months and now I've got bugger-all to show for it.

Oh...
Still, wish you all the best for the future

thewisecrab said:
Oh...
Still, wish you all the best for the future

Thanks mate! I'll need it

M

p!e said:
Some facts about SATYAM

*Employs 53,000 people, operates in 66 countries
*Won 2008 global award for excellence in corporate governance by World Council for Corporate Governance (WCFCG)
*Becomes official IT services provider for the FIFA World Cups, 2010 and 2014
*Ramalinga Raju, Satyam's founder and chairman, won Ernst & Young's 2007 entrepreneur of the year award

[/URL]

HAHAHA ...... really gud one ... corp governance award 4 satyam
it was clear that something was fishy in accounts 4m a long time especially after the maytas fiasco..... neways very brave of mr.raju to come out in the open.....

more unwanted pain for the economy .....

mehra.rakesh said:
HAHAHA ...... really gud one ... corp governance award 4 satyam
..... neways very brave of mr.raju to come out in the open.........

What? brave? :lol:

It was cowardly if you ask me, to say that they have fudged papers, booked fake profits, and then resign leaving the company in the loop.

realdan said:
very soon enterprising film producer will try to make a film based on the whole saga

Yes and that guy will be none other than Madhur Bhandarkar. KK Menon will play an alcoholic Raju. He will be gay and straight at the same time. The name of the movie will be "Software"

.

amitabhishek said:
Yes and that guy will be none other than Madhur Bhandarkar. KK Menon will play an alcoholic Raju. He will be gay and straight at the same time. The name of the movie will be "Software" .

ROFL

A better name would be "Asatyam" (Falsehood

)
But, seriously, this is a grave issue.
Satyam has been removed from Nifty and Singapore Index as a result of this.

H

Kl@w-24 said:
Long story. In short, I was selected in 2 companies. I ditched the other one (Tech Mahindra) for Satyam, waited for 6+ months and now I've got bugger-all to show for it.

me too bro was waitin 4 doj from Satyam for the past 7 months and now all my hopes of joining Satyam r shattered.

theres only 1 hope for me now i.e doj from L&T Infotech.hope they send it quickly and nothing similar happens to them too.

confused!! said:
An honest question: Why Satyam showed fake profits???What was their motive

IMHO the company was caught up between the devil and the deep sea. If you show real profits..you may loose investors and share price will start falling down..which anyways is not a good sign.

If you don’t want to or can not afford to take this risk, then you may probably have to take another risk of ‘fake it until you can make it’
Sadly it could not make it.

G

Update:
Izard Nobel LLP and Vianale & Vianale LLP have filed class action lawsuits against Satyam in the U.S.
The NYSE has suspended trading of Satyam ADRs which had fallen to $0.01.
CLSA India has valued the company, minus its debt, at $600 million as of today.

On a side note, the stats for job layoffs in private sector firms the U.S. for December '08 are out - a staggering 693,000, compared to 533,000 in November. A total of 2.4M people lost their jobs last year.

patkim said:
IMHO the company was caught up between the devil and the deep sea. If you show real profits..you may loose investors and share price will start falling down..which anyways is not a good sign.

If you don’t want to or can not afford to take this risk, then you may probably have to take another risk of ‘fake it until you can make it’
Sadly it could not make it.

The "fake till you make" tactic is not right.
WTF was the auditor doing? How could he allow all this to take place under his nose? And even if he did know about it, why didnt he inform the press earlier?

I read today in TOI that present CEO sidetsteppped the question that how margins were 3 %..

actually Raju siphoned majority of Satyam's profits in his own land ventures Maytas

I was first placed in Satyam...my doj was 21st Jan, 2008 but before that I got a call from Persistent and I joined Persistent on 6th September, 2007...Luck by Chance ....

@paragkalra lucky dude

but not 53000 people who are working in satyam. It was in news that company is almost out of cash and there is no guarantee that employees will be getting salary after Jan. Pathetic situation, and today satyam stock is priced at Rs 19.

What a mess, Mr Raju will be punished for what he did, but innocent 53000 workers who worked their a$$ off and people who invested their life savings into their shares will be facing consequences of his misdeeds.

dd_wingrider said:
@paragkalra lucky dude but not 53000 people who are working in satyam. It was in news that company is almost out of cash and there is no guarantee that employees will be getting salary after Jan. Pathetic situation, and today satyam stock is priced at Rs 19.

What a mess, Mr Raju will be punished for what he did, but innocent 53000 workers who worked their a$$ off and people who invested their life savings into their shares will be facing consequences of his misdeeds.

Some people believe that the moment Meryll Lynch handed in their papers, Mr.
Raju had the choice of either keeping quiet about it or exposing it.

Had he kept quiet, some firms in the US would have asked for a probe (into why Meryll Lynch quit handling Satyam's accounts), leading to the US probe finding this mess and then arresting Raju in lines of fraud.

And the penalty for fraud in US is far worse than that in India.

(Remember Enron?)

Where is this coward now? Some say he is in US, Dubai while his lawyer claims he is in India.

paragkalra said:
I was first placed in Satyam...my doj was 21st Jan, 2008 but before that I got a call from Persistent and I joined Persistent on 6th September, 2007...Luck by Chance ....

Satyam had given the date of joining? AFAIK there was no batch scheduled for January.

^ arrey Kl@w, his DOJ was Jan 2008... guess you've confused it with JAN 2009 !!

^ ^ ^ Ohh yes!!!! My mistake!!

***************Raju as Humpty Dumpty ****************

Raju Raju sat up on the wall
Raju Raju had a great fall
Balance sheet died
Shareholders cried
Raju Raju made a fraud

************ Raju Raju Black Sheep *************

Raju Raju
Yes People

Cheating us
No People

Telling Lies
No People

Open the balance sheet
HA HA HA

OMFG it even went to as low as Rs 6.95

I saw on NDTV that TCS has offered a bail-out for Satyam

^^ Encouraging!
Just read on TOI Satyam guys will not be getting salaries for two months. Is it true? If it is true then its really sad. The employees will have so many commitments. Loans, Children school fees etc...sad

Kl@w-24 said:
Thanks mate! I'll need it

Utilize your time now for higher studies if you like to. Best of Luck

amitabhishek said:
^^ Encouraging!
Just read on TOI Satyam guys will not be getting salaries for two months. Is it true? If it is true then its really sad. The employees will have so many commitments. Loans, Children school fees etc...sad

No, that's complete rubbish. Stories flying all around the net are mostly the creatinos of idle minds. No Satyam employee has received any such letter till now.

T159 said:
Utilize your time now for higher studies if you like to. Best of Luck

Yeah, I've appeared in 2 MBA entrance exams. The results will be out soon.

^ did u (Kl@w and T, anyone of u) appear for CAT ?? apparently results are out today....

^ ^ ^ By the time I woke up and went to buy a CAT form, there were none left.

G

Updates:
The Raju brothers (Ram and Ramalinga) have been arrested by the Andhra Pradesh Police under a variety of sections of the Indian Penal Code (120B for criminal conspiracy, section 420 for cheating, section 409 for criminal breach of trust, section 468 for forgery and also section 471 for falsification of records). A jail term of anywhere from 7 years to life imprisonment is what everyone is expecting.
Satyam's CFO is going to be arrested on Monday.
The entire board has been dissolved and the government will nominate 10 members to oversee the company.

Link

P

what about Sathyam's Staff Stats?

I heard Satyam is still hiring and people are responding to the interviews.

G

^^ That's probably because the ever shrinking job market has left the jobless with no choice but to interview at places like Satyam. I was on FB last night and found a friend who's been jobless for almost 3 months.

Some more news:

*in.indiatimes.com/specialcoverage/3962994.cms?in_showcase&in_showcase

It is revealed that they created fake 10000-12000 jobs either on company's active payroll or retired. The money they showed as salary for these 12000 employees was shifted to other accounts to acquire land here and there in the name of many fake companies.

It is very sad...

. Whatever is happening in Satyam...

G

digitized said:
Some more news:

*in.indiatimes.com/specialcoverage/3962994.cms?in_showcase&in_showcase

It is revealed that they created fake 10000-12000 jobs either on company's active payroll or retired. The money they showed as salary for these 12000 employees was shifted to other accounts to acquire land here and there in the name of many fake companies.

It is very sad.... Whatever is happening in Satyam...

More like 13,000 employees amounting to $4M every month = $307 (Rs. 15K every month). Shows you the kind of salaries Satyam's been paying to those ghost employees. Are fresher salaries really that low?

^ possibly BCA freshers or something like that... I dont think BE/Btech freshers would be paid 15k... guess Kl@w can throw some light on this

^ ^ ^ Yes, B.E. freshers don't have 15K pm package. It's considerably more.

So more and more scams are coming out day by day. Highly sad for Satyam.