India s Satyam Fraud Boss Quits
CHAN:
It’s India’s biggest corporate scandal in memory and it casts a cloud over growth in its once-booming outsourcing sector.
The head of the Indian outsourcing firm Satyam Computer Services has resigned after admitting profits had been falsely inflated for years.
STORY:
Outsourcing giant Satyam Computer Services is India’s fourth largest software exporter – at least it was until it’s founder admitted massively inflating profits.
Ramalinga Raju has confessed that 94 percent of the cash on the company’s books – that’s one billion dollars – was fictitious.
He and his brother – Satyam’s managing director – resigned after Ramalinga made the shock revelation and Mumbai’s main stock index fell seven percent.
The corporate scandal is the biggest in living memory in India and the Minister for Company Affairs has promised an investigation.
[Prem Chand Gupta, Federal Minister, Company Affairs]:
“Once the facts are verified proper action will be taken. If it is correct it is shameful and it should not have happened.”
Banker Merril Lynch immediately ended its contract with Satyam and India’s Chamber of Commerce and Industry called for a new look at business ethics.
[Amit Mitra, Chamber of Commerce and Industry, India]:
“So what we are looking at is a systematic failure in a given company which need not happen in every other company but which needs to provoke fresh thinking on how corporate governance can rise to new levels where these filters do not fail and shareholders and stakeholders’ interest can be kept alive in a system consistent with prudential norms which are required.”
Raju says he’s now prepared to face up to the legal consequences of his actions.
He says his failure last month to buy two building firms was the final straw.
Ironically the company was given a top award last year for the way it was run.
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August 27th, 2009 at 8:30 am
IAbsolutelyAgree();
IAbsolutelyAgree();
August 27th, 2009 at 8:30 am
Satyam is just the …
Satyam is just the tip of the iceberg.
All Indian companies are criminals. They have to be – they can’t make Microsoft-level money creating anything.
These are the same frauds who get into U.S. companies and then claim “we can’t find any qualified American workers”.
August 27th, 2009 at 8:30 am
HA HA India. Now …
HA HA India. Now the whole world knows the truth about “Indian IT”.