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Friday: Raju’s bail plea hearing
Jan 16th
Hyderabad: Bail plea of Ramalinga Raju will be heard on Friday by Hyderabad court.
On January 12, besides Ramalinga Raju, the court had delayed the hearing of the bail plea of Ramalinga’s brother Rama Raju and Satyam’s Chief Financial Officer Vadlamani Srinivas.
All are in judicial custody till January 23 and have been lodged in the Chanchalguda Central Prison.
The court will also listen to a request filed by the Security and Exchange board of India(SEBI) for quizzing Raju and the two others while they are in judicial custody.
Raju’s lawyer Bharat Kumar told journalists that a team of 25 lawyers has been put together to defend Raju and others.
In the meantime, police stepped up their inquiry into the case, having charged Ramalinga Raju and B Rama Raju with illicit conspiracy and forgery after Raju admitted profits had been flimsy for years and quit.
A case has been filed in opposition to Raju under Sections 120-B (criminal conspiracy), 406 (criminal breach of trust), 420 (cheating), 468 (forgery for cheating) and 477-a (fraudulent cancellation of securities) of IPC.
Raju had disclosed a financial fraud in the company to the tune of Rs 7,800 crore by inflating profits and showing fictitious assets where none existed.
The company’s scrip has fallen nearly 80 per cent since the exposure was made.
Three new members appointed by Govt on Satyam board
Jan 11th
The Govt has acted rapidly few days after the Rs 7000 crore Satyam scam came to light.
It has selected a new board bringing together greatly appreciated persons from the fields of Finance, IT and Law. HDFC Chairman Deepak Parekh, former NASSCOM chief Kiran Karnik and former SEBI member C Achuthan represent the new board.
Making the declaration, Minister of Corporate Affairs PC Gupta said, the government agencies have began probe into the Satyam scam in a matched manner and have completed “commendable progress”.
Speaking to NDTV, Minister of Corporate Affairs PC Gupta said, “No actions are being ruled” on Satyam front. “We are keeping all the options open,” he said, when asked about whether the government is looking at bailing out the beleaguered IT company, which is facing a liquidity disaster.
The recently selected board will gather over the next 24 hours to make a decision on a future course of action and will also take a call on who else to take in the new board.
The board takes more than at a time when the fate of nearly 50,000 employees remains undecided with liquidity being a serious fear. Investor assurance is also rock-bottom.
“Will ensure there is business continuity. It’s important to maintain customer confidence. Will get the company back on track,” said Kiran Karnik.
On Friday, the government had disbanded the board of Satyam Computer for “failing to do what they were supposed to”.
In the meantime, Satyam’s fallen promoters Ramalinga Raju and his brother Rama Raju will spend the next two weeks in judicial supervision at the high security Chanchalguda prison in Hyderabad. They have been remanded to judicial custody till January 23.
They were interrogated for 18 hours on Saturday and their bail pleas have been discarded. V Srinivas, the chief financial officer of Satyam was also under arrest late Saturday night.
While Raju’s counsel is probable to apply for bail on Monday, police will try for custody.
The CID has raided different associate companies of Satyam. The stock market watchdog SEBI has also filed a request to question Ramalinga Raju.
For now, the CID has formed teams to catch the other directors of Satyam Computer and auditors of PricewaterhouseCoopers who have been listed as the accused in the case.
Oil strike called off, after Govt pressure
Jan 10th
New Delhi: Public sector’s oil firms strike which nearly crippled India was called off after three days. Friday evening, almost immediately after the government warned that the strikers would be sacked if they did not continue work.
‘Yes, we have called off our agitation,’ Sanjay Varshney, one of the vice presidents of the Oil Sector Officers Association (OSOA) that launched the strike Wednesday, told IANS.
Saturday and Sunday have moreover been stated running days at the state-owned power companies in a worried bid to reinstate normalcy across India after thousands of fuel stations ran out of supply, paralyzing road traffic in numerous places and striking hard refineries.
There were symbols of the strike coming apart while Friday afternoon with staffers of power firms starting job in batches after warnings of group dismissals.
Attendance at Bharat Petroleum (BPCL) rose 40 percent, those at Oil India (OIL) withdrew from the strike, and employees of Indian Oil Corp (IOC) in the southern region resumed job.
The OSOA, the umbrella body of about 45,000 workers of more than a dozen state-run energy firms, were demanding high salaries.
A few hours prior to the strike finished, Petroleum Minister Murli Deora asserted that the objection was put to finish.
‘The illegal strike seems to be over. In the whole country, the situation has improved,’ the minister said.
‘Near-normal situation is expected in BPCL by evening. The IOC (Indian Oil Corp) Panipat refinery will start output later today while the Mathura refinery will start operations within 12 hours,’ he said. ‘The government is confident the strike will be called off within next six to 12 hours.’
Deora, who discarded talks with the strikers if they did not restart work, Friday morning required the Territorial Army’s assist to stop the stalemate.
The disaster management assembly of the cabinet met in the morning and determined that the government would not bend over to the strikers.
Petroleum ministry Secretary R.S. Sharma warned striking employees to call off the strike or face the axe.
‘There are only two options before you: join work immediately or face arrest under ESMA (Essential Supplies Maintenance Act) or NSA (National Security Act),’ Pandey said.
Maintaining that ‘there is no pleasure in dismissing people’, Pandey said that strikers might moreover face firing from service.
And to confirm that it was no inactive warning, the Oil and Natutral Gas Corp (ONGC) sacked 64 employees. IOC and GAIL India (formerly Gas Authority of India) axed three staffers each, he said.
According to Pandey, only a third of IOC outlets were prepared crosswise the country. For BPCL it was a slight over 65 percent as at 95 percent it was the utmost at Hindustan Petroleum, whose employees had not joined the strike.
Equally Deora and Pandey asked the people to end fright buying.
Throughout the day, fuel-starved autorickshaws, taxis and private vehicles went off the roads in India’s financial capital Mumbai, putting millions to poverty. The circumstances was only slightly better in New Delhi, where road traffic thinned by evening as scores of petrol and diesel pumps ran out of supply.
As fright mounted all above the country with motorists jostling for what little was obtainable in petrol stations, Home Minister P. Chidambaram said: ‘Strong action would be taken and I believe strong actions are being taken. If someone from the army has to be called, they will be called.’
Satyam Board disbands by Govt
Jan 10th
On Friday the Government disbanded the present board of disturbed IT company Satyam and would suggest 10 directors to the panel.
“The current Board ceases to exist and there would not be any meeting tomorrow,” Corporate Affairs Minister Prem Chand Gupta said.
“The Centre is considering appointment of suitable persons as directors of Satyam following interim permission by the Company Law Board,” he said.
The fresh Board would assemble in the next seven days. The present Board was left with merely three members from the unique nine.
Gupta told that the fresh Board would make a decision on the fresh organization for Satyam Computer and there was no choice to get over the management as yet.
He also said that the IT firm’s auditors PwC, if found culpable, would be expelled in the country.
“The government has decided to approach the Company Law Board to ensure that the operations of the company continue uninterrupted,” Gupta said, adding that the present board has unsuccessful in what it was thought to do.
All the present board members were being detached and there would not be any assembly on Saturday, he added.
The government had approached the CLB, which has permitted it to control the present board members from implementation as the directors at the company.
On Wednesday, Sataym’s originator and Chairman Ramalinga Raju resigned from the company after disclosing huge financial irregularities at the company, which emerged as the major corporate scam in the country. On the same day, its CEO and MD Rama Raju also resigned, while the company’s CFO also sent in his resignation on Thursday.
Satyam Computer: Raju quits
Jan 8th
On Wednesday Satyam Computer plunged into a deep disaster, as B Ramalinga Raju resigned as its Chairman after admitting to main economic wrong-doings and saying his last-ditch hard work to fill the pretended resources with real ones through Maytas acquisition failed.The under pressure IT giant, already under scanner over the aborted acquisition of firms promoted by the Chairman’s family, received a impolite upset days ahead of its January 10 board conference, with Raju stepping down along with his brother and Managing Director B Rama Raju.
‘It was like riding a tiger, not knowing how to get off without being eaten,’ Ramalinga Raju said in a letter to Satyam’s board of directors, wherein he listed most important financial wrong-doings over the years to increase the earnings.
Listed at New York Stock Exchange, the company could face rigid action in the US, analysts said. While Raju suggested DSP Merrill Lynch be entrusted the job of rapidly exploring few union opportunities,’ the company informed the stock exchanges that the investment banker has ended its engagement with Satyam.
Noting that all effort to eliminate gaps in balance sheet, entirely on account of inflated earnings over a number of years, failed, Raju said: ‘I am now prepared to subject myself to the laws of the land and face consequences thereof.’
Low proportion of supporter equity in the company, where four independent directors resigned in the last two weeks over the acquisition fiasco, could lead to a takeover and expose the gap, he said in the letter, also sent to regulator SEBI.
The promoters’ contribute in Satyam has now curved in to just above 3 per cent that too is pledged with lenders. Shares of Satyam plunged by over 40 per cent right away after the declaration of resignations, necessitating an overhaul of the Board and management.
Raju will carry on as Chairman till the Board finds a alternate, even as assumption was common that Satyam President Ram Mynampati would take over as Chairman.
Rama Raju would also go on as Managing Director, but only till the time the Board is extended.
Ramalinga Raju requested the Board to clutch jointly to take some vital steps, while hoping that one of the Board members T R Prasad was well-placed to mobilize support from the government at this essential time.
Satyam is the country’s fourth leading IT firm and has more than 51,000 employees. Giving facts of the financial irregularity, Raju said the company’s balance sheet as of September 30 carries exaggerated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 crore reflected in the books.
‘The balance sheet also carries an accrued interest of Rs 376 crore which is missing, an understated liability of Rs 1230 crore on account of funds approved by me (Raju), an showy debtors position of Rs 490 crore (as against Rs 2651 crore reflected in the books,’ Raju said.
He further said that Satyam reported a profits of Rs 2700 crore for the September quarter and an working margin of Rs 649 crore (24 per cent of revenue) as against the real revenue of Rs 2112 crore and an real working margin of Rs 61 crore (3 per cent of revenue).
‘This has resulted in artificial cash and bank balances going up Rs 588 crore in Q2 alone,’ Raju said.
‘The gap in the Balance Sheet has arisen simply on account of exaggerated profits over a period of last some years (limited only to Satyam standalone, books of subsidiaries reflecting true performance).’
‘What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years,’ Raju further said.
‘It has attained unmanageable proportions as the size of the company operations grew significantly… The differential in the real profits and the one reflected in the books was further accentuated by the fact that the company had to carry additional resources and assets to justify higher level of operations thereby significantly increasing the costs,’ he
said.
‘The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. Maytas’ investors were convinced that this is a good divestment opportunity and a strategic fit. Once Satyam’s problem was solved, it was hoped that Maytas’ payments can be delayed. But that was not to be,’ he said.
Raju, on the other hand, claimed that neither he, nor the Managing Director(including our spouses) sold any shares in the previous eight years-excepting for a little amount stated and sold for charitable purposes.
Raju further said he or the company’s MD did not take even one rupee/dollar from the company and have not benefited in economic conditions on account of the exaggerated results.
