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Just read about this in News.com.au
THE head of Indian outsourcing company Satyam Computer Services quit overnight, after disclosing that profits had been falsely inflated for years and sending its shares plunging nearly 80 per cent.
India's biggest corporate scandal in memory threatens future foreign investment flows into Asia's third-largest economy and casts a cloud over growth in its once-booming outsourcing sector.
News of the massive fraud sent Indian equity markets into a tailspin, with Bombay's market falling 7.3 per cent.
Ramalinga Raju, founder and chairman of Satyam, the fourth-largest software services exporter in India, said that Satyam's profits had been massively inflated over recent years.
Mr Raju, who founded Satyam as a family business with his brother and brother-in-law more than two decades ago, said about $US1 billion ($1.4 billion) or 94 percent of the cash on the company's books was fictitious.
He added that no other board member was aware of the financial irregularities at the Satyam, which in Sanskrit means "truth."
News of the massive fraud casts doubt on Satyam's plans to spend $75 million on a base at Deakin University, which was expected to create 2000 jobs over the next 8 years, reports the "Riding a Tiger"
"It was like riding a tiger, not knowing how to get off without being eaten," Mr Raju said, adding he was prepared to face up to the legal consequences.
Satyam rose to prominence in the late 1990s when Raju was among the first to spot outsourcing opportunities in the Y2K rollover problem.
"I think there is no future for this stock. This case for India is similar to what happened to Enron in the US," said Jigar Shah, senior vice-president at Kim Eng Securities.
"It will not stop at Satyam. Many more companies will come into scrutiny like that. There is a strong possibility investments in India will be affected."
The scandal set off a wave of condemnation from Indian market regulators and government officials. The company's auditor, PricewaterhouseCoopers, did not comment.
"It's going to impact the Indian outsourcing industry. Customers are going to be concerned about offshoring firms in India," said Sudin Apte, country head of Forrester in the western city of Pune.
RK Gupta, managing director at Taurus Asset Management in New Delhi said:"If a company's chairman himself says they built fictitious assets, who do you believe here?
"This has put a question mark on the entire corporate governance system in India," said Mr Gupta.
Source...
Cheers
Marc
Just read about this in News.com.au
THE head of Indian outsourcing company Satyam Computer Services quit overnight, after disclosing that profits had been falsely inflated for years and sending its shares plunging nearly 80 per cent.
India's biggest corporate scandal in memory threatens future foreign investment flows into Asia's third-largest economy and casts a cloud over growth in its once-booming outsourcing sector.
News of the massive fraud sent Indian equity markets into a tailspin, with Bombay's market falling 7.3 per cent.
Ramalinga Raju, founder and chairman of Satyam, the fourth-largest software services exporter in India, said that Satyam's profits had been massively inflated over recent years.
Mr Raju, who founded Satyam as a family business with his brother and brother-in-law more than two decades ago, said about $US1 billion ($1.4 billion) or 94 percent of the cash on the company's books was fictitious.
He added that no other board member was aware of the financial irregularities at the Satyam, which in Sanskrit means "truth."
News of the massive fraud casts doubt on Satyam's plans to spend $75 million on a base at Deakin University, which was expected to create 2000 jobs over the next 8 years, reports the "Riding a Tiger"
"It was like riding a tiger, not knowing how to get off without being eaten," Mr Raju said, adding he was prepared to face up to the legal consequences.
Satyam rose to prominence in the late 1990s when Raju was among the first to spot outsourcing opportunities in the Y2K rollover problem.
"I think there is no future for this stock. This case for India is similar to what happened to Enron in the US," said Jigar Shah, senior vice-president at Kim Eng Securities.
"It will not stop at Satyam. Many more companies will come into scrutiny like that. There is a strong possibility investments in India will be affected."
The scandal set off a wave of condemnation from Indian market regulators and government officials. The company's auditor, PricewaterhouseCoopers, did not comment.
"It's going to impact the Indian outsourcing industry. Customers are going to be concerned about offshoring firms in India," said Sudin Apte, country head of Forrester in the western city of Pune.
RK Gupta, managing director at Taurus Asset Management in New Delhi said:"If a company's chairman himself says they built fictitious assets, who do you believe here?
"This has put a question mark on the entire corporate governance system in India," said Mr Gupta.
Source...
Cheers
Marc
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