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Posts tagged Satyam Computer
Satyam: More arrests in Satyam case says Andhra Police
Feb 5th
Even as SEBI officials are quizzing Satyam Computer creator B Ramalinga Raju and his brother Rama Raju at the Chanchalguda jail in Hyderabad, the Andhra Pradesh Police are probable to make further arrests in the Rs 7,800-crore fraud linking the IT major.
CID officials investigating the case have not ruled out further arrests in concerning a fortnight.
“We are constantly scrutinising the seized documents and trying to retrieve data from the hard disks and laptops recovered during the raids of residences and offices of Satyam officials including its former chairman B Ramalinga Raju,” a senior CID official inquisitive the Satyam fraud said on Thursday.
There are over 25 trunks full with detained documents and “we are putting all our efforts to scrutinise (them) with the help of financial experts,” the CID official said.
To recover the data from the detained computers, the CID has been captivating the services of experts of the National Informatics Centre (NIC) and Forensic Science Laboratory, besides IT experts within the department, he said.
He said the probe organization has been prearranged by the court to share the information it has unearthed from the detained matter with other Central investigating agencies like SEBI, the SFIO and the Income-Tax department.
Approached for takeover: Satyam
Jan 21st
New Delhi: Domestic and foreign companies has approached troubled software exporter Satyam for takeover, the IT company’s board member Tarun Das said on Tuesday.
The board will meet for two days starting January 22 in Hyderabad and would talk about the issues such as search CEO and CFO, legal matters and instant cash necessities to run the company, he told reporters in New Delhi.
The board would also discuss whether it needs to ask the government to stand as a guarantor for raising loans. Das said the company has been approached for takeover by both international and Indian IT firms. There have been unverified reports that the company might soon employ investment bankers to give guidance on a merger or sale.
Earlier, another board member Deepak Parekh had said that choice of merger was always open for the company. The board meeting would conscious on class action lawsuits filed against the company in the US.
The six-member board, selected by the government to run the firm after a shocking Rs 7,800 crore fraud revelation by founder Ramalinga Raju on January 7, last met on January 17.
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.
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.
