SATYAM Chairman Gives His Resignation From The Post
Wednesday, January 7th, 2009
The Chairman of Satyam Computers, Ramalinga Raju resigned after saying he falsified earnings and assets, prompting a collapse in the stock of India’s fourth- largest software-services provider.
Raju unsuccessfully tried to sell two companies to Satyam last month in a final attempt to plug 50.4 billion rupees ($1.03 billion) of “fictitious” cash on the company’s balance sheet, he wrote in a letter to Hyderabad-based Satyam’s board today. Profits have been inflated for “several years,” he said.
Also Read Satyam actual letter from Mr. Ramalinga Raju to its board directors admitting fraud
Satyam, which means “truth” in Sanskrit, plunged in New York trading, after earlier dragging down India’s benchmark index, in a scandal described as “horrifying” by markets regulator C.B. Bhave. Raju’s reign unraveled in the past month as a shareholder revolt blocked the asset purchases, a World Bank ban kept Satyam from bidding for orders and four directors quit.
“This is a black day for India, the software sector and corporate governance claims,” Arun Kejriwal, founder of Kejriwal Research & Investment Services, said in Mumbai. “If at all there’s an event that could be the biggest setback for corporate India, it is this.”
Goldman Sachs Group Inc., Citigroup Inc., HSBC Holdings Plc, and Credit Suisse Group AG suspended coverage of Satyam, which slumped a record 78 percent in Mumbai. The National Stock Exchange removed Satyam from its main Nifty index after the benchmark slumped 6.2 percent.
Satyam’s American depositary receipts fell $8.42, or 90 percent, to 93 cents at 9:14 a.m. in early New York trading. (more…)
