Today can surely be called “A Shameful day” for the entire Indian corporate industry as one of the high profile Indian public companies,Satyam Computers’ Chairman,Ramalinga Raju resigned today and confessed about the fake projections about his company’s performance and financial status.
Raju confessed that company’s balance sheet carried inflated figures from year on year.The company had been projecting non-existant profit & revenue figures and this had been happening for nearly 10 years within the company.
In his five page resignation letter to Satyam’s board of directors,he admitted that for the second quarter which ended Sep 30, 2008,the company reported a revenue of $560mn (Rs 2,700 cr) and an operating margin of $135mn(Rs 649 cr) as against the actual revenues of $440mn(Rs 2,112 cr) and an actual operating margin of $12.5mn(Rs 61 crore).All this resulted in non-existant cash and bank balances up by $122mn(Rs 588 cr) in the second quarter alone.
Although Ramalinga Raju,ex-Chairman,Satyam Computers has taken all the blame on his ownshoulders in this massive scammy affair by clearly denying any other individual/authority’s involvement in this fraud but this isn’t possible as any public company of such a scale,undoubtedly involves hierarchy of financial execs and auditors and chairman alone can’t fool entire financial backbone of the company and keep on manipulating company’s revenue figures for so many years.There has to be a potential number of fraudsters in the company to keep projecting fake financial status to its clients,investers and general public for such a long span.
And the stock market has strongly reacted to the scam,putting Satyam’s worth down by more than 70% in a single day.And it will go even worst.Let the stock market open again and we will certainly witness Satyam,getting badly ruptured as market sentiments have been badly hurt with this incident.
So,what’s next for Satyam now ?
Layoffs ? Losses ?? or Shutdown ???
Don’t be impatient as we won’t have to wait for long to find this answer….
And a kind suggestion for anybody still holding Satyam’s shares and hoping for Satyam’s situation to turn positive…
Just SELL THEM OFF !!!