Software Company in "India's Enron"

Jeff · #1 (**permalink**) 01-07-2009, 03:40 PM

Chairman B. Ramalinga Raju of Satyam Computer Services in Mumbai, India's fourth largest software company, announced today that for several years the company's balance sheets were pretty much works of fiction. As a result the stock collapsed pulling down the Sensex.

Satyam shares crash 77% after $1 billion overstatement - MarketWatch

Quote:

Shares of Satyam Computer Services crashed 77% in Mumbai Wednesday, after the founder and chairman of India's fourth-largest software company resigned, saying the company had inflated its cash and bank balances on the balance sheet by more than $1 billion.

How they managed to get this past the auditors is beyond me...

Ceres · #2 (**permalink**) 01-07-2009, 04:15 PM

Quote:

Originally Posted by Jeff

How they managed to get this past the auditors is beyond me...

Yes, that's an interesting question.

Satyam is doing badly these days as it was also recently barred by the World Bank for 8 years.

DomainLobe · #3 (**permalink**) 01-08-2009, 03:04 AM

It can happen in any capitalistic society.

This event can be viewed in a positive light - India will be forced to take administrative measures and bolster their accountability in order to attract future investments from cautious worldly investors.

It should increase the standards by which Indian companies conduct their business and accounting practices.

Jeff · #4 (**permalink**) 01-08-2009, 05:25 AM

Very true, DomainLobe.