Satyam trouble is over. Seriously. On Wednesday, January 7, 2009, a startling revelation by Mr. Ramalinga Raju, chairman, Satyam Ltd, took the India Inc by storm. in fax stated to the board of directors, Mr. Raju confessed to have grossly misappropriated the company funds to the extent of Rs 7136 crores (approximately).its share prices slashed by almost 77% to close down at Rs 40.25.nifty has already removed it from its trading list, w.e.f January 12,2009.Sensex lost 749 points. Aberdeen international, fidelity investment and other major equity holders exited satyam completely.53, 000 employees rendered jobless.
Image of India Inc tarnished. Indian IT sector jeopardized. Collateral damage to individual shareholders. Doubts looming over standards of corporate governance. FII endangered. What else? Is there any scope of things going right? These are just the immediate effects. Long-term ones are still to surface.
So who is responsible for this? Mr. Raju, obviously. He stepped forward and assumed the responsibility for all that happened. But question still arises what the CFO, Directors and the auditors of the concerned company were doing. Dint they look into the books of accounts. Dint they try to even find out whether the figures reported in the balance sheet are tangible or fictitious? The profit was stated over 10 times in the balance sheet as on September, 2009. Were they negligent? Or kept in dark? Or a privy to it? Time will only tell as ICAI plans to start a serious probe into all this.
There is absolutely no cash with the company, not even to meet the payroll commitments. Profitatability is miserable. It’s almost dead in the water. So all this makes the prospects of it being taken over by some other company, very meek. The road ahead is indeed bumpy. Other companies will also suffer mostly because of the risk-aversion attitude shareholders will now exhibit. With some confidence building measures (CBMs) this can be still controlled. But what about the 53,000 employees. Attention indeed has to be paid to their plight.
The whole act has indeed shaken the faith of shareholders and consumers which they had instilled in company and now we can just keep our fingers crossed that there are no more such stories, confessions and frauds in store.
