| Font Size |
By the end of the day, the fourth largest IT company lost a staggering Rs 10,000 crore in market capitalisation as investors reacted sharply and dumped shares, pushing down the scrip by 78 per cent to Rs 39.95 at BSE. The NYSE-listed firm could also face regulator action in the US.
The government, regulator SEBI and the industry reacted with shock and anguish over the turn of events that could tarnish India's corporate and raise vital issue like ethics, corporate governance and accounting and business practices.
Acting in tandem, Corporate Affairs Ministry and SEBI announced that the episode would be probed and action taken against the perpetrators of the fraud that entails inflating profits and creating fictitious assets.
"I am now prepared to subject myself to the laws of the land and face consequences thereof," Raju said in a letter to SEBI and the Board of Directors, while giving details of how the profits were inflated over the years and his failed attempts to "fill the fictitious assets with real ones."
The Maytas firms, although promoted by his family, proved to be his nemesis, with Raju saying: "The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones... But that was not to be. What followed in the last seven days is common knowledge."
While the government said the entire issue would be referred to the Serious Fraud Investigation Office, SEBI described it as an event of "horrifying magnitude." "It was like riding a tiger not knowing how to get off without being eaten," said Raju.
Removal from Sensex, Nifty
Satyam Computers may be removed from the Sensex and Nifty following the revelation of manipulation in the company's accounts, analysts said. Rajiv Mehta, senior analyst with India Infoline, a large brokerage house said his firm has immediately stopped covering Satyam and many other brokerage houses are also expected to do the same. There will not be any investor interest in the company anyway. The company may be removed from sensex and nifty, he said.
With the fall in its stock prices, Satyam has lost its weightage in the sensex considerably over the recent past and currently has weightage of only 1.56 as of Tuesday. While in nifty, the weightage is only 0.63 per cent.
B Ramalinga Raju can get a 7-year jail term
Satyam Computer Chairman B Ramalinga Raju can face seven years' imprisonment in addition to monetary penalties for forging accounts, breach of trust and misappropriating funds.
"He (Raju) can be charged under various sections of the Indian Penal Code for falsification of accounts, cheating and breach of trust. These offences attract a maximum penalty of seven years," said a senior partner of law firm Titus and Company, Diljeet Titus.
Expressing a similar opinion, senior Supreme Court advocate C A Sundaram said, "If the admissions (made by Raju in his resignation letter) are true, it is a very serious matter. It would be violation of (the) SEBI (code), Company Law and the IPC".
Another senior advocate and corporate law practitioner U K Chaudhary said the Satyam chief could be imprisoned for seven years under various provisions of company law. "Under section 628 of the Companies Act, which deals with misrepresentation of accounts, he could be punished for a maximum of 2 years along with penalty. However, the punishment term could be extended to seven years for producing false affidavits and other documents," he said.
In addition to Raju, Titus said "action should also be taken against Chief Financial Officers, Finance Managers, and Legal and Tax Advisors for their complicity in this episode".
Suggesting that the CBI should get into the case, he said if appropriate action is not taken, the Satyam fiasco would "make a mockery of the Indian enforcement mechanism".
Discuss this story on expressindia forums
|
|
I do agree with most of you that this fellow will go unpunished. He will join politics, who knows this person will write a book and make millions!. Justice in India remains a far distant dream for common-man. Given that, why would Raju leave India ? He will happily live in his palace, protected by multi layer security and there will be streams of politicians who will visit him for $$$ as the elections are very near. As long the current political setup lives in india, he will be protected.good luck
raju should be investigated by FBI .the company was listed in USAhe should get life imprisonment
Some will say this financial fraud will go on for ever the end will never arrive as govt. would go for under table drams. I think that govt of India is least concerned about justice to every Indian. I having a feeling that all judicial process in India should be heard at International court as Judiciary is a joke in India.
what were the auditors doing for years?like Warren Buffet said : when the tide goes down you can find who were all swimming naked !!
The Jerk must have siphoned all the money, a proper investigation has to conducted. This jerk is worse then the terrorist coming in from LeT or Taliban. he is directly responsible for all the 53,000 employees, their families, and all the vendors whom Satyam must be owning large sums of money.
Firstly the gotv. should employ board of members who can effectively execute the clients project at Satyam. Directors, all the funny top layer members, auditors, bankers, Raju's sons, his assets should be frozen and the govt. audit body should find the goof mechanism employed by Raju. There will be some after effects but all should be made certain other IT cooperate body that the IT is here to stay in India.Most do not know, but here is a fact: the day Indian neta and babu decide to give justice and respect to Indian that day onwards billion worth of projects will issued as tender. We are light years away from a coordinated system (e-health, education, networking all departments, national ID card, networking all police vans/quails to online network, etc.) that serves citizens.Though we should contain our population but integrating all the department will make India a place worth living.The only hope to make India worth living is
Will SEBI grant Ram Raju and the top Managers bail?Ben Madoff is still free .in trinidad,Andre Monteuil the Chairman,bought over home Mortgage Bank through the TTSE while he wasTreasure of th ruling political party-not even a slap on the wrist. the NFM is a mess of pottage and 'dog rice'.
All Board member, Auditor, Financial Department and evry person who had a part in the scandal should be prosecuted. Raju should not be allowed to leave the country untill allthe investigation is complete and justice is delivered.If india has to set a good example of dealing with corporate fraud, it is byprosecuting all satyam scam members.
WELL DONE RAJU, YOU KIND OF PEOPLE NEED TO OUR SOCIETY TO TEACH SHOCKY LESSONS EVERY NOW AND THEN.WE INDIANS ARE REALLY INNOCENT AND GET DECEIVED VERY EASLY.WHERE DID THE MONEY GO, HOW COULD YOU MANAGE TO HIDE THIS KIND OF FRAUD TILL NOW. HATS OFF TO YOU, HARSHAD, TELGI, LALU, NATWARLAL, SHOBHRAJ,AND NOW YOUR STORY WILL ALSO BE INCLUDED IN OUR INDIAN FRAUD HISTORY.THANKS FOR THE NICE-KICK OF THE BACK BONE OF THE INDIAN ECONOMY.AFTER COMMON MAN IS GOING TO SUFFER, DONT WORRY NOTHING WILL HAPPEN,YOU WILL COME OUT FROM THIS VERY SMOOTHLY, AND ALL THE INNOCENT INDIAN CITIZENS WILL REMAIN MERE SPECTATORS.
I believe most of the Indian companies except few exceptions practicing this fraud. Few months ago Anil Ambani released IPO for Rel Power and no one knows when the company is going to operational and all investors lost the money in the initial IPO. This guy made billions of dollars without showing anything. Now the crucial question is how quickly the government comes up with new laws to check balance sheet of each company before releasing their quarterly results?.
Earlier Gujarat dehydrade orchestrated fraud.NOTHING HAS HAPPENED
became rich, while protecting them for yrs. BJP struggled to built the computer and outsourcing business leading India to a stellar position. Congress came. INTEL business gone! And now fraud is now finding place even in computers! No furure for India,unless BJP comes back to power and rules for 20 yrs.
All Our Regulators SEBI/BSE/NSE/NSDL/DCA/MCA are toothless. They are good in issuing dikats only but not following it up. We have a grievance against Sterlite Industries who Forcibly acquired shares acquired thru IPO in 1993. We must have written innumerous complaints to SEBI/BSE/NSE/NSDL/DCA/MCA but in vain. All they do is just forward the complaints and nothing more It appears that you are very confident that SEBI/BSE/NSE /NSDL/DCA/MCA are powerless and cannot do anything. Good luck to all investors Kumudha and Suresh
Nothing will happen to Ramalinga Raju because he is closely connected to CM of Andhra Pradesh and as long as Manmohan Singh is PM and Sonia Gandhi is defacto PM as Congress is a beneficiary of this company. The losers are LIC who invested 5% and other innocent investors and employees. More than this, image of India and Indian Corporates is at stake.
People are very smart!Ramalinga raju has become the god for many families for many years! May be his plans and ideas may not be implemented in a right way! My Advice to SATYAM Employees "DONT WORRY YOUR HARDWORK PAYS"
No Indian govt has the guts to punish corrupt businessmen. And majority of Indian businessmen are corrupt to their cores. It’s quite well known that big industrial houses, mainly lala type organizations like Birlas, Ambanis do use public banks for a free ride. Not a single political party or organizations ever demanded that loans and bad debts must be paid off by such industrial houses and took punitive actions against errant industries and its CEOs and higher officials. No govt ever forced the any industry not to pollute local environment (getting a non-pollution certificate is different than not polluting it), builders in Mumbai or Delhi or any other city to give govt approved minimum wage or provide a decent living for the laborers (industries/builders leave them to sleep on the roads) they import from very impoverished areas like Bihar or UP etc. It seems that everything is justified in the name of “development” and “investment” in India these days.
Dont cry about the spoilt milk, let us think how can we redeem the prestige of india, How can we save the unemployed lots and their families, how can we do the commitment to the companies who have given the order, Thebest solution seems to be taking over of the company as it is what it is, and run it with a new management, the government of India should also become a member in the board by paying an amount to salvage the company to run in its track
To save India from defame, so far as IT industry is concerned, it is high time for India goad some company to take over at the reasonable price, to save employees and the companies who have given them order. or else the result would be abnormal
It have disputed Our Indian Credibility in IT industry worldwide.With these type of thing our IT industry will suffer.
I think issue is that Indian Entrepreneurs too are falling for the lure of 'becoming corporates'. Media, Govt. and we the People, all, acknowledge this shift as a good thing. What happening is a shift from "consumer is the king' mentality to 'investors(stock) are the king' attitude. Companies loose focus when they try only to keep their shares up. This is encouraged in media, and is fueled by foreign investors who are preying in India to plunder its wealth and our savings for generations. When a company is valued by its share value alone....this is bound to happen. I really appreciate Raju for stating the truth and being bold.
Pl. do not whip up frenzy!!! The way we are hearing reactions no other corporate house in India has not or is not doing any thing similar. I am sure this is rampantly happening in India. What is so new... Only who are clean should only throw at Satyam.
all IT Giants are fraud including satyam,vipro, TCS. own and operated by a group of con-artists
I could not agree with many of these comments. Yes, there was a fraud and Raju has disclosed it. He also mentioned that he did not gain anything. I agree that the auditors did a poor job and failed to report the fraud. When Satyam paid huge dividends, people accepted it with both hands. Did any shareholder question the accounts in the AGM? Now they are spewing venom on poor Raju. Satyam has a lot of good business and it should not loose them. Don't kill that company and add 50,000 families to the problems. I am sure Satyam can weather this storm and come stronger. (I have nothing to do with Satyam - neither a well wisher nor a shareholder nor an employee.)
News heading is a joke, he will never go to jail.Do we have any precedence powerfull people with murder charges went to jail leave alone financial frauds. Most probably AP politicians will milk money from him to save from going to jail.
Nothing will happen to this businessman in India. The only hope to get justice is US. I hope US will give exemplary punishment to such Indian businessmen who never been punished in India.