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In a shocking news which Arun Kejriwal rightly describes as the black day for India, software sector, corporate governance and which could turn out to be the biggest setback for corporate India, Satyam Chairman Ramalinga Raju has resigned from the chairman’s post claiming about bogus company bank balance.
Raju shocked the corporate Satyam board and software industry after he sent his letter to them. The bloomberg news article says that:
“Raju unsuccessfully tried to sell two companies to Satyam last month in a final attempt to plug 50.4 billion rupees ($1.03 billion) of “fictitious” cash on the company’s balance sheet, he wrote in a letter to Hyderabad-based Satyam’s board today. Profits have been inflated for “several years, said Raju””
Rama Raju, the outgoing chairman’s younger brother and Satyam’s managing director, also resigned, the company said. This has led the BSE boggled whether to keep Satyam in their listings or not. While the National Stock Exchange has excluded Satyam from the Nifty 50 and S&P CNX 500 with effect from January 12.
The business week article says:
“The startling revelation prompted a collapse in the stock of India’s fourth-largest software services company. Satyam, which means “truth” in Sanskrit, plunged a record 78% on the Bombay Stock Exchange, dragging down the Sensitive Index in a scandal described as “horrifying” by Securities and Exchange Board of India Chairman C B Bhave.”
This is absolutely horrendous on the part of Raju to keep so many investors and employees in dark. Satyam had also came for placement in our college and I was already having an inclination about the volatile phase of company as they had asked selected students(after placement test) to deposit some money as security before joining.
But at that time no one had this inclination that company which has the name of Satyam meaning truth will have a chairman who was befooling people by showing fake balance. Now its on the India Government to take strict action against culprits keeping in mind that neither employees nor the investors of Satyam are hurt.
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