fraud-at-satyam-drags-down-sensex

Fraud at Satyam drags down Sensex

The Satyam saga continues with the company's chairman and managing director resigning over accounting fraud. Satyam's shares lose almost 80% and drag down the overall market.

By Sameera Anand

January 07, 2009

Satyam Computers' chairman Ramalinga Raju and managing director B Rama Raju yesterday tendered their resignations, taking responsibility for accounting fraud at the firm. According to a letter to Satyam shareholders that was sent to the Bombay Stock Exchange, the fraud pertains to both balance sheet entries and profit and loss items. The revelation caused the stock to drop 78% in one trading session and turned sentiment in Indian stockmarkets bearish.

The scale of the accounting fraud is huge. As of September 30, the most recent six-month accounting period, the Satyam balance sheet carries inflated non-existent cash and bank balances of Rs50.4 billion $1 billion as against Rs53.6 billion reflected in the books, accrued interest...

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