Jan 8, 2009

Satyam? Not exactly..

The last few days had Ramalinga Raju pull the veil before Satyam sending the entire market into chaos. It is a scam of unbelievable proportions. Especially in an industry touted to have brought unprecedented corporate governance to the Indian market. Now that Infosys has distanced itself from Satyam thereby quelling any hopes of a takeover or rumours of a combined operation with the other IT giants, Satyam is on the brink of total collapse (if it has not already).
Here is the full text of Raju's letter to the Board.

Pricewaterhouse Coopers were the auditors for Satyam and only God knows what they were auditing while earning those big bucks. Surely, this is going to be only the tip of the iceberg. Raju's claims of nobody knowing about this account imbalance seems too far-fetched because aChairman and MD would not be the only people who verify the balance sheets of such a huge organization. As start pouring in, this would surely turn into a huge mess as the concerned more people from Satyam and Pricewaterhouse to SEBI would be held accountable for allowing this to happen.

Raju has stated that it started with small accounting imbalances and over the years perpetuated into gargantuan proportions. Whether this was an act done with criminal negligence or with an intent to dupe the investors only time will tell. But one thing is for sure. The Indian IT industry will never be the same again.


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