Satyam Scam Scandal - Ramalinga Raju Ponzi Scheme

After the US financial world was shaken by Bernard Madoff admission of misappropriating investors fund in his so-called Ponzi Scheme or Madoff Scheme, it's India turn to be shaken by a financial scandal. The latest Indian financial scandal has been aptly named Satyam Scam or Satyam Scandal. Ramalinga Raju the of Chairman and founder of Satyam has resigned abruptly from Satyam board after he admitted his fraud scam.

With this latest event, Satyam and anything related to Satyam has dominated the Google Search Engine result page for today.

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* Biggest Business Scandals Of 2008

SEBI Chairman C B Bhave is talking to the media and calling the developments baffling and is also talking about the Statutory Auditors of the Company PricewaterhouseCoopers (PWC) and how they certified the company accounts for the last six years without getting a wind of any wrong doing ! The Ethics and Business conduct of PWC which they claim is based on excellence, teamwork and leadership!! Big words, but they are yet to make a statement on clearing their position. The PWC Auditors certainly have a lot to answer!

BlogTactic: Remember the ENRON scandal and their auditor was Authur Anderson. Big auditor firm, big cover up.

Investor Confidence Shaken - The Investor confidence is really shaking and it is hard to digest that after two big stock market scams, there was a possibility that a so called giant could have such inflated figures. It has long been discussed in undertones that a lot of so called Indian Stock Market Giants follow window dressing to show inflated profits, but this is the first time that a fraud of such scale has emerged in a huge corporate giant of the size of Satyam.

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The WallStreet Journal: The Shame of Satyam

Voting with your feet isn't necessarily the best way to enforce strict corporate governance, as the scandal at Satyam Computer Services is likely to prove.

For shareholders in many of India's family-controlled companies it's the only viable option available.

Fund managers dumped Satyam's shares in December after the company said it would buy two property companies part-owned by its founders. Those acquisitions, quickly abandoned, rang so many alarm bells that Satyam's U.S.-listed shares plunged as much as 60% in New York.

Wednesday's disclosure that those property deals were in fact a last-gasp attempt to fill a hole in its finances, falsely inflated for years by its founder and chairman, Ramalinga Raju, pays off on every bet made against the company.

The whole affair -- already being dubbed India's Enron -- throws India's corporate governance into sharp relief. That Mr. Raju thought it appropriate to spend $1.6 billion on two firms so unrelated to Satyam's business and in which he had a financial interest, without seeking shareholder approval, speaks volumes about his sense of what his shareholders would tolerate.

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The New York Times : Satyam Shares Plunge on Scandal

The chairman of Satyam Computer Services, a leading Indian information technology company that serves numerous Fortune 500 companies, resigned on Wednesday after disclosing major accounting irregularities, sending Satyam’s shares down 77 percent, The New York Times’s Heather Timmons and Bettina Wassener reported.

Ramalinga Raju resigned after revealing that the company’s financial position had been massively inflated during the course of the company’s expansion from a handful of employees into an outsourcing giant with 53,000 employees and operations in 66 countries.

Mr. Raju said Wednesday that 5.4 billion rupees, or $1.04 billion, of the 53.6 billion rupees in cash the company reported at the end of its second quarter that ended in September were nonexistent.

In a lengthy statement to the Bombay stock exchange, he described how the gap had grown over several years. “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,” his statement said.

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Now Public : Ramalinga Raju Chairman Satyam Computers resigns : Irregularities

Ramalinga Raju Chairman Satyam Computers (NYSE: SAY ) resigns over Financial Irregularities. A few weeks back India's leading financial daily reported that he had sent in his resignation to the Board and as it was confirmed today that he has resigned due to massive financial irregularities. He has admitted that the books of the company were inflated by INR 5040 crore, translating into INR 50400 million.

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Reuters : India shares provisionally fall 7.3pct, Satyam dives

Indian shares provisionally shed 7.31 percent on Wednesday after the head of Satyam Computer Services (SATY.BO) resigned and said the firm's profits had been inflated sending its stocks down more than three-fourth.

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Street Insider : Reports HP Is Eyeing Satyam Computer (SAY)

Before this scandal, there were reports that suggest HP could be attracted by Satyam's lucrative business software practice and the opportunity to challenge rival IBM's bigger, low-cost offshore capabilities is also alluring.

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About Satyam Computer Services, India

Satyam Computer Services Ltd. was founded by B.Ramalinga Raju in 1987, (he has resigned as Chairman and CEO on 7th-Jan-2009);Satyam means "truth" in Sanskrit. The company offers a variety of information technology (IT) services spanning various industry sectors, and is listed on the New York Stock Exchange and Euronext.

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