Everyone in the India IT space has been closely following the satyam fiasco. Its been written about in most newspapers. But what has taken the IT space by storm today is the resignation letter that has Ramalingam Raju of Satyam admitting to forging revenue numbers and having an inflated balance sheet of over 5000 crores. This is as bad as news can get in these times for corporate india.
Well and bad news spreads online.. So the resignation is on facebook for all to read. We are also reproducing the same below.
As you can read from the letter above this isnt the greatest thing for the Indian IT reputation world over. Lets hope this doesn’t worsen the slowdown in India.
RAMALINGA RAJU APPOINTED SEBI DIRECTOR, IT’S TRUE!! READ FULL AND EXCLUSIVE NEWS AT http://www.fakingnews.com
Give the devil his due! Raju says neither he nor any member of his family have benefited (not even a Rupee – two US cents) from the `fraud’. And he had the courage to come clean, something that you don’t expect from any one, including the media that is baying for his blood, and the numerous corporate leaders and politicians. What one must consider is the role played by the auditors – PriceWaterhouse and other directors. Was this auditor also the auditor for Enron? Again Raju has said that none of the directors – past and present – have anything to do with the inflated revenues and profits and takes the entire blame on himself. His story is good enough for a Hollywood movie. Yes, it is an accounting fraud but where are the beneficiaries who have any slush money?
Think about it.
By the way, I don’t own any Satyam shares, my wife does – about 50 of them. I am not related to Raju either. You can’t accuse me of any personal bias to look at the whole thing as a tragedy. Satyam may be a big company and so more investors would have lost money because of the fall in its value. But there have been umpteen companies whose shares are worthless now and what had happened to the promoters? Have they been punished? There was an private airline that went under, somebody else from Chennai bought it and we have not heard anything about it thereafter. What about those holding that company’s shares? This is market capitalism dudes – anything goes!
I appriciate Mr.Raju for accepting his wrong doings . when so many have never accepted thier wrong doing in corporate world . Mr. Raju Should be hailed for doing the same.
He should have thought about the dependent employees and investors before taking any decisions……. these decisions are taking a major setback in their financial positions and life.
I really admire Raju for his openness. I am wishing that things will come normal after sometime. He had no option to show funds, to enable company dont loose faith or share value.
which company doesnot give wrong info for existance, which company doesnot show more employees and more competency of candidates for projects. This is a part of business..
wow, mr. vemula pradeep
how can you praise him for his openness when a far more heinous crime has been committed. Damn this openness in front of that.
We have such a low expections of the both the corporate and political people that we praise a person as hero for coming clean after frauding and cheating people. This is nothing aganist Mr. Raju. What he has done is prasie worthy compared to other folsk in the corporate world. Atleast he is not like Enron or Lehman CEO.
The fact he came out in open does not diminish the fact that he committed fraud on a such a large scale. But again this is India. Most of the politicans are involved in crimes much much greater than that, yet they not only go scott free they also hold the power.
I am in a dilemma as to should we praise Mr.Raju for coming out in open (even if it is at the brink of investigation) or should we feel cheated for the high fraud he committed. I am angry at the Board for not seeing this for so long. What were they doing there? Is it not there job to represent the share holder stake and look for the benefit of share holders. The CEO is answerable to the board, but they never asked him any questions. Until he himself came out they did not bother to check.
its a very common thing in this corpoarate bussiness,atleast he has agreed his mistakes,wht abt politicians in india ruining the croces of lives in india.
Guys
Get real with the situation. A fraud committed is a fraud committed . Damn the courage which every one is talking here. If the books were falsified over a period of years how is this possible without the knowledge of senior management. With Lines of business accounting, cost centres , margin analysis and all the ultra modern software which these Tech companies have created, are shareholders / regulators thumbsuckers to buy this … Is any one assuming that when Raju says no one benefitted that is real. If the “accounting / financing team alone was aware” has to be inferred just imagine how much more bungling could have happened. Also , the star Board of Directors their audit committees , their meetings have all failed to detect this looks like reading a great fable with one monster amongst angels and none of the angels ever knew about this. Take your memory back to 2 weeks from now when Worldbank blacklisted Satyam of attempt to fraud its US staff. Could that be true as well – it strongly looks like.,
A strong action and a stronger resolve is required. If you guys are going to compare everything to politics then there is no end to comparison. Its we the people select the leaders and we deserve what we select.
Raju tried effort to bring back SATYAM on track, but it could not controlled by his efforts, instead of considering this crime… we should look at this positive side of problem.. he has created 53000 jobs all over country.. many people got settle financialy in their lives because his great vision.. may be if Govt permits he can take some constructive steps to pay back all money to all stake holders….
This happens in every business and its the bad luck for Mr. Raju. Some are caught and some does not. Atleast Mr. Raju dared to come forward and accept it…
Bad for who said “They will not touch a tainted company like Satyam”, as if the employees working in Satyam are not Humans…
Hope some good companies come to save Satyam and its people…
For me, Raju seems to be genuine. I dont think he did any thing wrong – instead he intend to save his employees and the organization as a whole at this stage. I guess things were messed up because of the greedy share holders who want high returns for less investment.
Auditor’s Independence
What is Independence, if the Auditor’s Appointment is made by the Promoter who holds majority stake or has can get through the resolution because, he is managing the company ie. a listed company.
As one of the Professional who is into company audits for the last 25 years always feel that there is clash of interest being appointed as auditor by the Promoter who holds majority stake or he has a say in the company because he can yield pressure on appointment in the General Meeting.
I was also part of the Audit Team when our Audit Firm were Statutory Auditors and Audited Banks and Companies like State Bank of India, Vijaya Bank, Indian Overseas Bank, BEL, HMT and other Government Organizations. Here the joint auditors used to work as team, with discussion jointly we used to identify the areas where we need to concentrate more and get information from the company / bank. Audit finalization was done with mutual consultation on matters which we need to qualify based on Materiality and other factors.
If an analysis is made on the Quality of Reporting on these Public Sector Companies and the Audits made by the Big Four, the Quality of Reporting of Auditors who are not part of Big Four, surpasses the Quality of Big Four by a Great Margin.
Solution lies within the Shareholders and Investors of all listed entities to Identify an Audit Firm who are not part of Big Four and make them Joint Auditors along with Big Four who are already Auditors in that company on doing this there will a change in the reporting pattern to the Share Holders and Investors or there is already a Body already which appoints Auditors for Public Sector Banks and Companies which can be tapped to get the information on Auditors who have a good track record on Audit of Companies.
To Avoid major mishaps in the financial reporting, Appointment of Joint Auditors of 2, 3 or 4 etc based on the Turnover of the Enterprise is very important as one auditor will not be able to exercise independence and report in the factual matter.
I request all the Investor community to look into this and implement the suggestion given so that Second Satyam Fiasco will not Happen Again.
Jai Hind
M.R.Jayaprakash
Chartered Accountant
Bangalore
Cannot believe that the whole thing happened without the knowledge of Directors.Many officers, staff in the finance department should be aware of these manipulations.The benefits enjoyed by the directors in their business through Satyam ,role of banks should be probed into,. It is a big fraud.
Raju is the first person in corporate world to tell the “truth”, where he confessed his mistake. On positive side, all the accounting practices all over the world in corporate world will be corrected based on this incident. He will be punished for his mistake, but he did it only to save the company and stood as role model to start cleaning up accounting practices.
First of all we don’t know how much of his story is true at the moment. Second thing is he spoke out when he had no other option…there was a chance of his fraud being exposed any way.Had it been 1 or 2 years back..may be one could have considered him truthful.There is also a suspicion that all satyam’s money was actually diverted to maytas..
Look at what he has done. -> some Investors may give a second thought before making investment in India
-> So many employees have taken big loans..he has left them hanging no where. He has to be punished
just a few weeks ago he was trying to buy Maytas, which failed. Had the deal gone through who would have benefited..obviously Raju and his sons…. now since Raju didn’t get that money, he devised a new way… siphoned off all the money from Satyam in the 2 weeks that he got and then sends a letter claiming that Satyam never had this much money…
In the first place his intention in buying Maytas was for stealing the investor money, for which there was a huge public backlash… so hook or by crook Raju was able to get the money that he wanted….