09 Jan 2009

Satyam CEO/Chairman, Ramalinga Raju Quits

This is shocking. TV channels are reporting that there were financial irregularities over the year in Satyam's books ( revenues/cash balance/liabilities ).

Satyam CEO, Mr. Ramalinga Raju has resigned! If anyone's got more updates, please post in this thread!
:evil:

Addendum:
Reported by rediff: https://www.rediff.com/money/2009/jan/07ramalinga-raju-resigns.htm

The balance sheet has inflated cash balances of Rs 5,040 crore (Rs 50.40 billion) and accrued interest of Rs 376 crore (Rs 3.76 billion) is non-existent. Rs 1,230 crore (Rs 12.30 billion) was arranged to Satyam and is not reflected in the books.

He admitted that second quarter numbers were inflated to Rs 2,700 crore (Rs 27 billion) when the actual figure was Rs 2112 crore (Rs 21.12 billion). He also said that other board member were unaware of the real numbers.

He admitted that the accounts manipulation started a few years ago. The attempts to stop manipulation failed, he said in his confession.

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).

The gap in balance sheet has arisen purely on account of inflated profits over a period of last several years.

The resignations, ahead of January 10 board meeting pushed the company into crisis and paved the way for immediate restructuring of the board and the management.

Satyam, considered a ripe proposition for acquisition, was pushed into crisis after Raju was forced to abandon the acquisition of Maytas Infrastructure and Maytas Properties promoted by his son.

In a regulatory filing the company said Raju would continue to be the chairman till the board is expanded.

"Under the circumstances I am tendering my resignation as the chairman of Satyam and shall continue in this position only till such time the current board is expanded. My continuance is just to ensure enhancement of the board over the next several days or as early as possible," B Ramalinga Raju said.

Satyam shares nosedived by nearly 54 per cent to Rs 83 after resignation of chairman, and managing director. DSP Merrill Lynch has terminated its engagement with Satyam Computer, the IT firm informed the Bombay Stock Exchange.

Meanwhile, reacting to the Satyam fiasco Sebi chairman C B Bhave said that the Satyam chairman's 'confession to the board is an event of horrifying magnitude'.
10 years ago
Re: Satyam CEO, Ramalinga Raju Quits

Its official now. Satyam (and Raju) admits fraud! What the...

Satyam share price falls down to Rs 51.00/- (and is going down rapidly). I'm hating this!
10 years ago
Re: Satyam CEO, Ramalinga Raju Quits

Rediff reports :

In a letter to the board, Raju has given balance sheet details. In a shocking revelation, he has said that the balance sheet details over the years was fictitious.

Reported by In -

CNBC-TV18 reports Raju, in his resignation letter, admitted that the IT major's balance sheet has inflated cash and bank balance of Rs 5,040 crore. "No board member had any knowledge of the real situation. Accrued interest of Rs 376 crore in books is non-existent. Rs 1,230 crore was arranged to Satyam, but was not reflected in the books."

According to Raju, Ram Mynampati will now act as an interim CEO. Raju said Merrill Lynch could be entrusted to explore merger options and he has asked auditors for restatement of accounts in light of the new facts

In a notification to the stock exchanges, the Hyderabad-based IT firm said Raju and Rama Raju have tendered the resignations earlier in the day and the regulator (SEBI) has been informed

Shares of the company also plunged by over 40 per cent soon after the resignations. Satyam, considered a ripe proposition for acquisition, was pushed into crisis after Raju was forced to abandon the acquisition of Maytas Infrastructure and Maytas Properties promoted by his son.
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
Re: Satyam CEO, Ramalinga Raju Quits

One of the worst in the history of Indian IT industry. I dont believe a company like Satyam committed fraud. The company is doomed!
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
Re: Satyam CEO, Ramalinga Raju Quits

Yep, he reportedly inflated the balance sheets in the quarterly earnings by over 6oo crore rupees. Thats way too much. I dont believe that the board members were unaware of this.
In a letter to the board, Raju has given balance sheet details. In a shocking revelation, he has said that the balance sheet details over the years was fictitious.
sauravgoswami

sauravgoswami

Electronic
10 years ago
Re: Satyam CEO, Ramalinga Raju Quits

It was expected,many of its directors quit over this,anyhow i hope its employees are not harmed due to this as of now when the job market is really tough,as for Raju,it doesnt matter he will come back in any other position
10 years ago
Re: Satyam CEO, Ramalinga Raju Quits

What will happen now? Infosys/Wipro will buy them? Merrill Lynch, you listening?
10 years ago
Re: Satyam CEO, Ramalinga Raju Quits

sauravgoswami
It was expected,many of its directors quit over this,anyhow i hope its employees are not harmed due to this as of now when the job market is really tough,as for Raju,it doesnt matter he will come back in any other position
MYTAS - (that's satyam reversed!) ; where else?

I found the following on Satyam's press page -

Satyam Accepts Resignation of Independent Director

Hyderabad, India, December 29, 2008: Satyam Computer Services Ltd. (NYSE:SAY), a leading global consulting and IT services provider, today announced the resignation of Prof. Mendu Rammohan Rao, Non-Executive & Independent Director, from its Board.

Earlier, as widely reported in the media, another independent director, Dr. Mangalam Srinivasan had resigned effective December 25, 2008.

B. Ramalinga Raju, Chairman and Founder, while thanking them for their valuable contributions, reiterated the importance of attending to the agenda item relating to reconstitution of the Board in the forthcoming Board Meeting.
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
Re: Satyam CEO, Ramalinga Raju Quits

Merrill Lynch has already snapped ties with Satyam, BSE reported today morning. I dont think Infy, TCS or Wipro would want to buy Satyam and inflate their workforce by another 15k heads.

I will be a MNC, a US based corporation or investors. But it has tohappen quick. Otherwise Satyam will have to file for bankruptcy
sauravgoswami

sauravgoswami

Electronic
10 years ago
Re: Satyam CEO, Ramalinga Raju Quits

I dont think satyam and wipro will buy them as of now,satyam doesnt have expertise in particular feild of-course it can be bought our by those companies who wants to ventur in IT and BPO,say Relaince or Birla
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
Re: Satyam CEO, Ramalinga Raju Quits

sauravgoswami
I dont think satyam and wipro will buy them as of now,satyam doesnt have expertise in particular feild of-course it can be bought our by those companies who wants to ventur in IT and BPO,say Relaince or Birla
Correction- Satyam is extremely strong in 1) Federal and Government Business and 2) SAP
10 years ago
Lots of people are benefiting through Short Selling! Way to go, money-makers!
10 years ago
The latest figure on TV is Rs. 7,000 crore that is [ Rs. 70,00,00,00,000 ] or $1437962799.82 fraud!

Can anyone from Satyam post Raju's letter to employees?
Ashraf HZ

Ashraf HZ

Communications
10 years ago
This reminds me of the movie Fun with D and Jane. Though, I doubt this situation will have a happy ending.
10 years ago
Raju's Mail to Board of Directors; released by BSE -

To the Board of Directors
Satyam Computer Services Ltd.
From B. Ramalinga Raju
Chairman, Satyam Computer Services Ltd. January 7, 2009
Dear Board Members,
It is with deep regret, and tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice:
1. The Balance Sheet carries as of September 30, 2008
a. Inflated (non-existent) cash and bank balances of 50.40 billion rupees ($1.04 billion) (as against 53.61 billion reflected in the books).
b. An accrued interest of 3.76 billion rupees which is non-existent.
c. An understated liability of 12.30 billion rupees on account of funds arranged by me.
d. An overstated debtors position of 4.90 billion rupees (as against 26.51 billion reflected in the books)
2. For the September quarter (Q2) we reported a revenue of 27.00 billion rupees and an operating margin of 6.49 billion rupees (24 pct of revenues) as against the actual revenues of 21.12 billion rupees and an actual operating margin of 610 million rupees (3 percent of revenues). This has resulted in artificial cash and bank balances going up by 5.88 billion rupees in Q2 alone.
The gap in the Balance Sheet has arisen purely on account of inflated profits over a period of last several years (limited only to Satyam standalone, books of subsidiaries reflecting true performance). What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It has attained unmanageable proportions as the size of company operations grew significantly (annualized revenue run rate of 112.76 billion rupees in the September quarter, 2008, and official reserves of 83.92 billion rupees). The differential in the real profits and the one reflected in the books was further accentuated by the fact that the company had to carry additional resources and assets to justify higher level of operations -- thereby significantly increasing the costs.
Every attempt made to eliminate the gap failed. As the promoters held a small percentage of equity, the concern was that poor performance would result in a take-over, thereby exposing the gap. It was like riding a tiger, not knowing how to get off without being eaten.
The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. Maytas' investors were convinced that this is a good divestment opportunity and a strategic fit. Once Satyam's problem was solved, it was hoped that Maytas' payments can be delayed. But that was not to be. What followed in the last several days is common knowledge. I would like the Board to know:
1. 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 purposes.
2. That in the last two years a net amount of 12.30 billion rupees was arranged to Satyam (not reflected in the books of Satyam) to keep the operations going by resorting to pledging all the promoter shares and raising funds from known sources by giving all kinds of assurances (Statement enclosed, only to the members of the board). Significant dividend payments, acquisitions, capital expenditure to provide for growth did not help matters. Every attempt was made to keep the wheel moving and to ensure prompt payment of salaries to the associates. The last straw was the selling of most of the pledged share by the lenders on account of margin triggers.
3. That 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.
4. None of the board members, past or present, had any knowledge of the situation in which the company is placed. Even business leaders and senior executives in the company, such as, Ram Mynampati, Subu D, T.R. Anand, Keshab Panda, Virender Agarwal, A.S. Murthy, Hari T, S.V. Krishnan, Vijay Prasad, Manish Mehta, Murali V, Sriram Papani, Kiran Kavale, Joe Lagiola, Ravindra Penumetsa; Jayaraman and Prabhakar Gupta are unaware of the real situation as against the books of accounts. None of my or Managing Director's immediate or extended family members has any idea about these issues.
Having put these facts before you, I leave it to the wisdom of the board to take the matters forward. However, I am also taking the liberty to recommend the following steps:
1. A Task Force has been formed in the last few days to address the situation arising out of the failed Maytas acquisition attempt. This consists of some of the most accomplished leaders of Satyam:, Subu D, T.R. Anand, Keshab Panda and Virender Agarwal, representing business functions, and A.S. Murthy, Hari T and Murali V representing support functions. I suggest that Ram Mynampati be made the Chairman of this Task Force to immediately address some of the operational matters on hand. Ram can also act as an interim CEO reporting to the board.
2. Merrill Lynch can be entrusted with the task of quickly exploring some Merger opportunities.
3. You may have a restatement of accounts' prepared by the auditors in light of the facts that I have placed before you.
I have promoted and have been associated with Satyam for well over twenty years now. I have seen it grow from few people to 53,000 people, with 185 Fortune 500 companies as customers and operations in 66 countries. Satyam has established an excellent leadership and competency base at all levels. I sincerely apologize to all Satyamites and stakeholders, who have made Satyam a special organization, for the current situation. I am confident they will stand by the company in this hour of crisis.
In light of the above, I fervently appeal to the board to hold together to take some important steps. Mr. T.R. Prasad is well placed to mobilize support from the government at this crucial time. With the hope that members of the Task Force and the financial advisor, Merrill Lynch (now Bank of America) will stand by the company at this crucial hour, I am marking copies of this statement to them as well.
Under the circumstances, I am tendering my resignation as the chairman of Satyam and shall continue in this position only till such time the current board is expanded. My continuance is just to ensure enhancement of the board over the next several days or as early as possible.
l am now prepared to subject myself to the laws of the land and face consequences thereof.
(B. Ramalinga Raju)
Copies marked to:
1. Chairman SEBI
2. Stock Exchanges
sauravgoswami

sauravgoswami

Electronic
10 years ago
Raju is brillaint,he has opened this scam during recession,anyhow he has raked in big-moolahs.any idea what is next for satyam???
10 years ago
sauravgoswami
any idea what is next for satyam???
Yep. Bad times.
Ashraf HZ

Ashraf HZ

Communications
10 years ago
Wait, won't this guy be brought to court?
aashima

aashima

Branch Unspecified
10 years ago
News channels also reveal that a special team is being formed to dig deep inside to gather the details of the commencement of the scam and its process of development. Aziz Premji, Ramodarai and Narayan Murthi are said to be in the team. Can they be really of any "substancial" help?

I was watching Corporate movie yesterday. I wonder if the Satyam scam is concluded in a similar way like the movie! I mean what if he might have taken the responsibility on behalf of someone else or may be many more board of directors were in his team? Its just a raw notion but you never know!!

{P.S.: For those who haven't seen the movie, it concludes where Bipasha Basu, senior executive in a company, has to take the entire responsibility on behalf of his boss of a scam the company carries out.]
10 years ago
Aziz Premji, Ramodarai and Narayan Murthi are said to be in the team. Can they be really of any "substancial" help?
I can't believe that. I bet all of them have lot of better things to do.
aashima

aashima

Branch Unspecified
10 years ago
sauravgoswami
Raju is brillaint,he has opened this scam during recession,anyhow he has raked in big-moolahs.any idea what is next for satyam???

He has been doing all this for several years now. I especially liked his quote "It was like riding a tiger and knowing its not possible to get off without being eaten!" 😁

Maytas acquisition deal was his last attempt to fill the place of fictitious assets of the company. With the failure of Maytas, he had no option and had to disclose!
shalini_goel14

shalini_goel14

Branch Unspecified
10 years ago
Came to know from rumours that Indian govt had a meeting with the CEOs of all Indian companies and discussed that it is not good to make so many employees of Satyam jobless.They have to do something for it. If these rumours are true, I wish its employees get new jobs soon.
sauravgoswami

sauravgoswami

Electronic
10 years ago
Good news is that Stayam is not shutting down,and they are going to make job-cuts by feb,report says Satyam may be acquired by one of the business houses of India,watever its employess are safe.
shalini_goel14

shalini_goel14

Branch Unspecified
10 years ago
sauravgoswami
Good news is that Stayam is not shutting down,and they are going to make job-cuts by feb,report says Satyam may be acquired by one of the business houses of India,watever its employess are safe.
Yep, I feel employees of Satyam are at present more secure than other companies' employees because everyone is thinking for them.

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