Satyam Fraud :- Crashed Share Market

Satyam (Sanskrit for 'truth') Computer Services Ltd. was founded by B.Ramalinga Raju in 1987. The company offers information technology (IT) services spanning various sectors, and is listed on the New York Stock Exchange and Euronext.
Satyam's network covers 66 countries across six continents. The company employs 52,000 IT professionals across development centers in India, the United States, the United Kingdom, the United Ara Emirates, Canada, Hungary, Singapore, Malaysia, China, Japan, Egypt and Australia. It serves over 654 global companies, 185 of which are Fortune 500 corporations. Satyam has strategic technology and marketing alliances with over 50 companies. Apart from Hyderabad, it has development centers in India at Bangalore, Chennai, Pune, Mumbai, Nagpur, Delhi, Kolkata, Bhubaneswar, and Visakhapatnam.

Corporate Governance
Satyam was the 2008 winner of the coveted Golden Peacock Award for Corporate Governance[, despite concerns raised by independent board directors and later stripped off the award . In 2008 the company attempted to acquire two infrastructure companies - Maytas infrastructure and Maytas properties for $1.6 billion. Both companies are owned by Satyam CEO Ramalinga Raju's sons. This eventually led to the probing of the deal by the government a veiled criticism by the vice president of India and Satyam clients re-evaluating their relationship with the company. Satyam investors lost about INR 3,400 crore in the panic selling. The USD $1.6 billion (INR 8,000 crore) acquisition was met with skepticism all around as Satyam's shares fell 55% on the New York Stock Exchange as well.
Considering that none of the Independent Board of Directors questioned the deals, investors are expecting a complete revamp of the Board. In line with this three of Board of Directors resigned on Monday 29th Dec 2008 .
The World Bank has banned Satyam to do business with it for a span of 8 years due to inappropriate payments to the World Bank's staffs. The World Bank in its own statement has denied allegations of "data theft/ malicious attacks", but confirmed the bribery and improper invoicing allegations.
UK mobile payments company Upaid Systems is suing Satyam for over 1 Billion dollars on charges of fraud, forgery and breach of contract.

Accounting Scandal of 2009

This section documents a current event. Information may change rapidly as the event progresses.
On the 7th January 2009, the company Chairman Ramalinga Raju resigned after notifying its board members and the SEBI that he had falsified accounts and assets. In a letter to the board, neither he nor the managing director took have benefited in financial terms on account of the inflated results. He confessed that none of the board members had any knowledge of the situation in which the company is placed. He noted that Satyam’s balance sheet as on Sep 30, 2008, carried an inflated (non-existent) cash and bank balances of Rs 5,04 crore (as against Rs 5,361 reflected in the books). Further, it carried an accrued interest of Rs 376 crore which was non-existent. An understated liability of Rs 1,230 crore on account of funds was arranged by himself. An over stated debtors position of Rs 490 crore (as against Rs 2,651 crore in the books).
He stated that "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. It has attained unmanageable proportions as the size of company operations grew significantly (annualised revenue run rate of Rs 11,276 crore in the September quarter of 2008 and official reserves of Rs 8,392 crore). As the promoters held a small percentage of equity, the concern was that poor performance would result in a takeover, thereby exposing the gap. The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. It was like riding a tiger, not knowing how to get off without being eaten.”
Raju had appointed a task force in the last few days before revealing the news to address the situation. Satyam's official website notes that "We are obviously shocked by the contents of the letter. The senior leaders of Satyam stand united in their commitment to customers, associates, suppliers and all shareholders. We have gathered together at Hyderabad to strategize the way forward in light of this startling revelation” said Mr. Ram Mynampati, Interim CEO (pending ratification by the Board) and Member of the Board, who has been mandated by the Board to steer the company through this crisis."
After this incident, India will need regulatory changes on the lines of Sarbanes-Oxley to minimise if not avoid corporate accounting frauds of such massive scale.

Aftermath
Analysts in India have termed the Satyam scandal as India's own Enron scandal Immediately following the news, DSP Merrill Lynch (Now with Bank of America) terminated its engagement with the company as Credit Suisse suspended its coverage of Satyam citation needed. It was also reported that Satyam's auditing firm PricewaterhouseCoopers will be scrutinized for complicity in this scandal.
The New York Stock Exchange has halted trading in Satyam stock as of January 7, 2009. India's National Stock Exchange has announced that it will remove Satyam from its S&P CNX Nifty 50-share index from January 12.

Ending
Today B.Ramalinga Raju resigned "Satya (truth) "of Satyam is out of the market. Satyam finally has done a fraurd. Satyam doesnt mean truth anymore but only means a LIE . Will Satyam Computer going to be over & shut or"it will come out with flying heights of profit". God Bless Satyam the Satya (truth).