Satyam's latest updates - May Axe 10,000 Employees: Headhunters

[nithyasubramanian]

Too many investigators spoil the probe

As a battery of lawyers prepare Satyam's former CEO Ramalinga Raju's defence, one big question that is now being asked is - could the number of agencies probing one scam turn out to be the real problem?

The government did act swiftly to get cracking on the Satyam puzzle, but even after the appointment of a new board of directors and arrest of its promoters, it is unclear which arm of the government will finally be responsible for putting the culprits behind bars and taking the investigation to its logical end.

"There has always been a turf war because it comes under min of corporate affairs and also under SEBI and hence the Finance Ministry. So duality has always been there," said C M Vasudev, former economic affairs secretary.

Let us take a look at the pieces of puzzle coming together.

SEBI will look into insider trading and the possibility of revamping clause 49 of the listing agreement.

The serious frauds investigation office will now look at Satyam's books but only after the registrar of companies conducted a preliminary investigation.

Meanwhile, the RBI will look into possible collusion by banks and the Andhra Pradesh Police will conduct the criminal investigation.

And apart from these, the ICAI is looking at the auditor's role.

Compare that to the United States where empowered by the Sarbanes-Oxley Act of 2002, the SEC alone looks at corporate reporting, insider trading and misrepresentations.

There is little wonder then that those involved in scams like GTB and Modi Xerox got away, while CEOs of Tycom, Worldomm and Tyco were all convicted.

Finance Ministry sources have told NDTV that SFIO is expected to lead the charge and all agencies will report to it, but experts say an integrated agency is a better option and even then, the real issue is the power to punish.

"Auditor who fails, the penalty is Rs 10000 under Companies Act. Give SFIO more teeth. We need to get a white collar crime penalties to rise," said Vinod Dhall, former secretary, company affairs.

The government's multiple arms could actually be trying to solve the same puzzle without having all the pieces and this can lead to more confusion.

Clearly a multi-layered scam like Satyam's requires close coordination between different government departments and it is in such cases that the need for a single investigating agency becomes imperative.

[nithyasubramanian]

Software engineer from Andhra Pradesh shot dead in US

Hyderabad, Jan 15 (IANS) Akshay Vishal, a software engineer from Hyderabad, was shot dead by unidentified people in Arkansas in the US, his father said Thursday.

Vishal, 26, was an employee of fraud-hit Satyam Computer Services Limited and was on contract with US company Jet Falcon. His friends informed the family about his death Wednesday.

Vishal's father N. Lakshman Murthy told reporters here that his son was getting into a car when some unidentified persons shot him in the legs in Little Rock, Arkansas, Tuesday.

'He was profusely bleeding and was rushed to a hospital but he succumbed to the injuries,' said Murthy.

The motive behind the killing is not known but Murthy, an official of the state-owned Bharast Sanchar Nigam Limited (BSNL), quoted Vishal's friends as saying that some African Americans shot him after an altercation.

The family plunged into gloom on the festival of Makar Sankranti. Vishal had earlier called to wish them on the occasion.

'He had called us from office and promised to call again after reaching home,' said Murthy.

Vishal, who held a MS degree from Alaska University, had gone to the US four years ago.

Murthy said they were told that it would take a week for the US authorities to send Vishal's body to Hyderabad.

'We want to go there to receive the body but we don't have passports and have requested the state government to arrange passports for us,' he said.

This is the latest in a series of killings of Andhra students and employees in the US. Shashank Pulluru, an MS student at the Middle Tennessee State University, was shot and injured by some African Americans in Tennessee on Nov 15 last year.

Arpana B. Jinaga, 24, a software engineer in EMC Corporation in Seattle, was found murdered in her apartment on Nov 3.

T. Soumya Reddy, 23, who was pursuing MS in electrical engineering at the Southern Illinois University, Edwardsville campus, was found dead in a car near a lake in Chicago in September. Her cousin Vikram Reddy, 27, who was a software engineer in Chicago, was also found shot dead nearby.

Srinivas, a postgraduate medical student from Karimnagar, was found murdered in Pennsylvania last March.

A. Kirankumar and K. Chandrasekhar Reddy, both PhD students, were shot dead by intruders in their apartment at Louisiana University in December 2007.

© Copyright 2009 Indo Asian News Service.

[nithyasubramanian]

More members appointed to Satyam's board

The government on Thursday appointed three more professionals on Satyam's board, even as member Deepak Parekh said the IT firm can raise funds by mortgaging assets - dispensing with the need for central assistance.
Apex industry association CII's chief mentor Tarun Das, noted chartered accountant and a past president of ICAI T N Manoharan and S Balkrishna Mainak of LIC, a major investor in Satyam, would join Parekh, Kiran Karnik and C Achuthan at the board. The expansion comes two days before the board is to hold its second meeting – on January 17.
Ruling out any bailout package, Corporate Affairs Minister Prem Chand Gupta, while announcing the new nominees, said: "The first impression from the government-nominated directors about the company is that its operations are sound and by and large major customers are willing to remain with the company."
"Until we know the real position, how can we speak of bailout... the company has receivables of Rs 1,700 crore," Parekh said, adding that "financial assistance can be generated by hypothecating some of the assets of the company."
The speculation about the bailout package heightened after Economic Affairs Secretary Ashok Chawla said that the government had received a mail or two from former acting CEO Ram Mynampati indicating that the company needs about Rs 150 crore.
He, however, did not elaborate on when the mails were received and Mynampati, who was appointed, acting CEO by the erstwhile board, is in the US meeting clients.
"I am confident that NASSCOM and major companies in IT sector in the country would support the efforts of the present management of Satyam in sailing through the present crisis," Gupta said, while announcing the board expansion.
The investigation into Satyam case has been entrusted to SFIO, which has already begun their probe and would submit its report within three months, while the probe is also underway in eight companies associated with Satyam group, including Maytas Infra and Maytas Properties, the minister added.
On two new auditors Deloitte and KPMG having been engaged to look into the accounts of Satyam, Gupta said that it would take a few weeks before they come out with any findings.
After his meeting with Gupta, Parekh also said that KPMG and Deloitte have begun their work and the board was meeting again on Saturday.
The three-member board, after their first meeting on January 12, had said that working capital was an immediate concern, but it had not yet determined the liquidity needed.
Besides Gupta, Parekh also met Planning Commission Deputy Chairman Montek Singh Ahluwalia on Thursday. After the meeting, he said that Satyam has large receivables and assets could be hypothecated after getting report from the accountants, who can take 8-12 months.
"Unless the accountants who are restating the accounts confirm the receivables, we do not know the veracity of correctness of the recievables," he said, while adding that a financial assistance might not be needed, if the company gets the receivables on time.
"The collections are coming everyday... As Satyam is a running company, lots of collections are planned... We are trying our best to salvage the company," Parekh said, adding that the salaries to the staff in the US were paid on thursday.
Earlier in the day, Gupta said that the company can raise funds from banks, if needed.

courtesy : NDTV.com

[nithyasubramanian]

Roses, posters, prayers for jailed Raju

HYDERABAD: Contemplating his fate from a prison cell, his reputation shattered, Ramalinga Raju, the founder of India's Satyam Computer Services, can still rely on supporters to whom he will always be a hero.
Across the southern city of Hyderabad, home to No. 4 software services firm Satyam, prayers are being said for Raju, the man who plunged the firm into crisis by revealing a fraud which is India's biggest corporate scandal.
"He was good at computers, bad at construction. He was not able to manage finance properly. You can't be good at everything," argued one Raju supporter, a college lecturer who asked not to be named.
Outside the jail where Raju is being held pending charges, supporters drop by to ask about him even as a probe into the fraud widens.
"Dear Sri Ramalinga Raju. We are with you. Please don't loose (sic) confidence. Wishing you a happy pongal," read one poster outside the city's Chanchalguda jail on Wednesday. A big pink rose was left by someone named "Nagaraj".
Pongal, a Hindu harvest festival, was celebrated in south India on Wednesday.
Satyam, which means truth in Sanskrit, has been battling for survival since Raju resigned as chairman last week, saying profits had been falsified for years and $1 billion of cash and bank balances did not exist.
The revelations have cast a pall over India's much-cherished software sector and had commentators lamenting a shameful lapse in corporate governance by one of the industry's favoured sons.
The fate of Satyam's 53,000 employees hangs in the balance, with statements from government officials on Thursday that there were no plans for a bailout adding to the gloom.
"But look at the way he built Satyam, created jobs. I don't think he has done anything wrong," the lecturer said, adding he had debated the matter with his wife and decided to use the holiday to show his support for Raju.
NO COCKFIGHTS, GAMBLING
A crowd of reporters and curious onlookers gathers outside the jail everyday for updates on its famous inmate, with guards sometimes bringing bits of news, including the celebration of Pongal with 'laddoos', a ball-shaped sweet.
"We sent him some," said Krishnamurthy, a guard.
But in Raju's ancestral village Garagaparru, about 400 km (250 miles) from Hyderabad, there were few festivities, with the traditional cockfight and card games nowhere to be seen, reported the Hindustan Times paper.
Instead, villagers printed large posters of support featuring pictures of Raju and his brother, Satyam's managing director, who has also been arrested over the fraud, the paper said.
Others in Hyderabad were less forgiving.
"He was like god," said Vijay Kumar, who runs a travel agency in the city. "He was the face of Andhra Pradesh. But after all this, he has lost that."

[nithyasubramanian]

Satyam: No bailout; shares off 32%

HYDERABAD: The government is not considering bailing out Satyam Computer Services, and the fraud-hit outsourcing firm may have to turn to banks, many of them state-run, if it needs funding.
Satyam shares slumped by a third on Thursday after Kiran Karnik, one of the three new Satyam board members appointed by the government, ruled out accepting government money as this would send the wrong signal.
The software services exporter has been battling for survival since founder Ramalinga Raju resigned as chairman last week, saying profits had been falsified for years and $1 billion of cash and bank balances did not exist.
"The government at this stage is not looking at any direct support or bailout to the company," Economic Affairs Secretary Ashok Chawla told reporters.
Corporate Affairs Minister Prem Chand Gupta said Satyam had not sought state aid.
"The company has not asked for any package. Three days ago a new board has been appointed. These (are) eminent persons. They are on the job," he told reporters in New Delhi.
"If they require funds, they will raise it from banks."
Karnik told the Times of India that Satyam was a financially viable company and would make profits in a few months.
He said taking government money would "send a wrong signal", after media speculation the state would have to pump cash into a company that imploded in the country's biggest fraud scandal.
The Times of India said raising funds from equity partners and banks was the new board's priority to meet working capital and pay staff salaries. Karnik told Reuters a board meeting would be held before the middle of next week.
Analysts said raising funds would not be easy until Satyam restates its financial account.
Satyam has appointed new auditors to examine the full extent of the fraud, find out how much cash it really has and restate its financial results.
"(This) restatement will take anything between 3-6 months, and, until this is done, any financial aid for the company from banks or financial institutions is unlikely," said Sudin Apte, country head of market researcher Forrester.
"In that sense, the uncertainty for Satyam continues."
Satyam shares sank to as low as 20.05 rupees, dragging down the main stock index by 3.8 percent. Satyam's market value has dived to about $275 million from more than $7 billion in mid-2008.
Shares in rivals Infosys Technologies and Wipro also fell after one of their clients, Nortel Networks Corp, filed for bankruptcy.
Analysts said Nortel's work contributed only a small portion of revenue for the outsourcers, but the news was another blow to the export-driven companies hit by the global economic turmoil.
DUMPING STOCK
Local media had estimated the government might have to pump up to 20 billion rupees ($410 million) into Satyam to keep it afloat and reassure nervous clients and employees.
"People are realising there is no bailout package. So people who have bought (the stock) before are dumping it," said Arun Kejriwal, director of Kris Research.
Satyam has about 50,000 workers and counts corporate giants such as Nestle and General Electric as clients.
It has not said it has lost any customers over the fraud, but was already under pressure before the scandal as recession stalked its key markets.
"It will take time for a proper recovery for the company, at least 2-3 months," said R.K. Gupta, managing director at Taurus Asset Management in New Delhi.
Raju, his brother and the company's former chief financial officer are being held in jail the southern city of Hyderabad, home to Satyam's headquarters, charged with criminal conspiracy and forgery.

[nithyasubramanian]

Insider trading in Satyam?

Market regulator Sebi's special team, set up to probe into the financial irregularities in Satyam Computer, has set its focus among other things on alleged 'insider trading' carried out by top executives in the IT firm in the recent past, sources said.

"Our major concerns in this case include any insider trading activities that might have occurred in Satyam shares and all aspects of fraud committed in the company's book," Sebi sources told PTI.

The market regulator formed an investigation team soon after Ramalinga Raju confessed that he cooked the company's balance sheet for seven years with inflated profit numbers and understated liabilities.

The three-member team, led by senior Sebi official A Sunilkumar, is understood to be progressing with its probe at Satyam headquarters in Hyderabad.

The team is primarily inspecting the irregularities committed by Rajus and other manipulators in stock market.

Text: PTI

[nithyasubramanian]

Satyam scam: So who is to blame?

Satyam is the biggest fraud in India's corporate history. That the company management, mainly disgraced chairman B Ramalinga Raju, kept everyone -- seemingly -- in the dark for a decade and tarnished shining India's image horribly, is as stupefying a fact as the Rs 7,800 crore (Rs 78 billion) scam itself.

The company's account books said that Satyam had over Rs 5,000 crore billion (Rs 50 billion) in the bank, when it did not. Raju said that he had been fudging the account books for 'several years' and despite this no one but he, and his brother, knew of this.

And though the two brothers, along with the CFO of the company Srinivas Vadlamani, have been arrested, there aren't many takers for this story. So experts, analysts, corporate honchos, lawyers and professionals are now pointing fingers at various people as being the culprits to this shameful act.

So who is guilty in this sordid state of events? Of course, Raju is by far the father of this fraud, but there were others who are also culpable, if not by complicity then by negligence. Reports indicate that more arrests are likely to be made in connection with the Satyam fraud.

courtesy  : rediff.com

[nithyasubramanian]

Stop being intrusive about Satyam: Murthy

Infosys mentor N R Narayana Murthy today called for a halt to "comments" and "second guessing" on Satyam and leave it to its new board and employees to revive the company.

Murthy told reporters on the sidelines of India's technology leaders conference here that he had stopped commenting after the new set of directors took over Satyam to revive it. "There is no need to discuss on issues concerning the impact Satyam will have on the IT industry," he said.

"Satyam Computer has a new board of directors in Kiran Karnik, Deepak Parekh and C Achuthan and it is best to communicate with them," he said.

Now that the board has been appointed, "rest of us should stop second guessing. The trio has a lot of experience. They have handled major crisis. I would rather leave it at that", Murthy said.

"We should give confidence to Satyam, its employees and leaders by distancing ourselves from making comments," the executive chairman of one of the largest software exporters and the NASDAQ-listed company said.

Asked what lessons the IT industry could learn from the Satyam crisis, he said the new board of directors need a couple of days to assess the situation and take decisions. "The rest of us should stop meddling and giving opinions."

On the future of Satyam, he said it was for the board members to discuss it as they have "good ideas".

He ducked a query on whether Infosys would show interest if Satyam was up for sale. "They have a board of directors. They are eminent," he said.

courtesy : Rediff.com

[nithyasubramanian]

Tarun Das among three new directors on Satyam board

The government Thursday named three more directors to the Satyam Computer Services board, including Tarun Das, chief mentor of the Confederation of Indian Industry (CII), even as it rejected a bailout package for the fraud-hit company.

Minister for Corporate Affairs PC Gupta also told reporters here that the Institute of Chartered Accountants of India (ICAI) was looking at possible lapses by the firm's previous auditors PricewaterhouseCoopers and would give its report soon.

He also said the Serious Fraud Investigating Office (SFIO) was examining not only the books of Satyam, but also seven other group companies, including those of Maytas Properties and Maytas Infrastructure, promoted by the sons of IT major's former chairman B. Ramalinga Raju.

Gupta told the hurriedly convened press conference that the other two directors named to the company's board Thursday were TN Manoharan, a noted chartered accountant, and Suryakant Balakrishnan, a nominee of the Life Insurance Corp of India.

While Manoharan is a past president of the ICAI, Balakrishnan represents LIC, which is one of the largest investors in Satyam Computer Services.

Satyam major is facing a financial mess and a serious threat in continuing its operations because of an Rs.70 billion ($1.43 billion) fraud admitted last week by its founder and former chairman B. Ramalinga Raju.

"The government has appointed three people of eminence to the Satyam board in accordance to the nomination by the company law board (CLB)," Gupta said, adding he expected the SFIO to submit its report within three months.

The government had earlier nominated three members to Satyam's board.

They are Deepak Parekh, chairman of Housing Development Finance Corp, Kiran Karnik, former president of the National Association of Software and Service Companies, and C. Achuthan, former member of the Securities and Exchange Board of India.

Earlier in the day, Minister of State for Industry Ashwani Kumar said the government has no plans to unveil a bailout package for fraud-hit Satyam Computer Services and the company's new board will decide its future course of action.

"This government is not going to either directly or indirectly subsidise the wrongdoing and fraud in Satyam," Kumar told reporters on the margins of an international conference on petroleum sector here Thursday.

"This is a decision that the new board of Satyam will take," he said, referring to the three-member board appointed by the government last weekend to restore the confidence employees, investors and clients on the beleaguered company.

The corporate affairs minister also said that the board has not asked for any bailout package and that the company had enough resources and capability to continue with its affairs.

According to Kumar, the scam at Satyam was an aberration that will not hamper the growth of the Indian software and business process outsourcing industries that have earned an enviable reputation the world over.

"The government will try to ensure to the extent possible that the brand equity of the country's IT sector and Satyam in terms of its intellectual capital is preserved and jobs are secured to the extent possible," he said.

"We will do whatever we can to preserve and save jobs and to protect the good name of the Indian corporate sector," he said, adding: "We will not intervene in the company. The new board will take the decisions."

courtesy : Hindustan Times

[nithyasubramanian]

Maytas Infra Chairman RC Sinha resigns

The Ramalinga Raju family promoted Maytas Infrastructure on Thursday said its chairman and non-executive director RC Sinha has tendered his resignation.

"RC Sinha, Non-executive Director and Chairman of Maytas Infra Ltd, tendered his resignation from directorship as well as chairmanship at the company owing to personal reasons," Maytas said in a filing to the National Stock Exchange.

Maytas Infra's board of directors include R P Raju (Independent Director), B Teja Raju ( Vice Chairman), PK Madhav (Wholetime Director and CEO) and Chander Sheel Bansal (Wholetime Director).

According to Maytas Infra's shareholding pattern as on September 2008, Ramalinga Raju's son Teja Raju held 2.53 per cent stake, while the entire promoter group, which includes other members of the Raju family, holds over 36 per cent.

Ramalinga Raju had tendered his resignation on Wednesday as chairman of Satyam Computer and disclosed accounting fraud.

courtesy : Hindustan Times

[nithyasubramanian]

Satyam operations are sound: Board tells Govt

New Delhi, Jan 15: Satyam Computers Board is of the view that the company's operations are sound and that its investors are willing to stick to it, Corporate Affairs Minister PC Gupta has said.

Announcing the names of three more members appointed by the Govt to the scan-tainted company's Board, the Minister said the Board will be allowed to take its own decisions. The nominations to the Board are: Tarun Das (CII chief mentor), SK Balakrishnan (from LIC) and Chartered Accountant PN Manoharan.

Deepak Parekh, chairman of HDFC Ltd, was nominated to Satyam's Board last Sunday along with former NASSCOM president Kiran Karnik and Securities Appellate Tribunal's past presiding officer C Achuthan.

The Govt has also said that the Board has not demanded any bailout package for Satyam. "Satyam might not need any financial assistance. If the company needs any money they can approach the banks. Satyam has also requisite resources," said Corporate Affairs Minister PC Gupta told reporters.

On the question of who will be the new CEO and CFO, Gupta said it was a decision to be made by the Board and that 'CEO & CFOs are not God.'

He added the Govt will do what needs to be done for public welfare. However he added, 'lets not dictate our own terms.'

courtesy : Zeenews Bureau.

[dwarakesh]

Rs 1700cr receivables offer hope to Satyam

After over a week of bad news, there appears to be some light at the end of the Satyam tunnel. The IT major has received assurances of financial lifelines from lending institutions, while its new board raised hopes that the firm's finances were not as dire as feared with its quantum of receivables being a healthy Rs 1,700 crore.

The government-appointed board also said it was open to take on "strategic investors". The good tidings on its finances might make potential "white angels" see an engagement with Satyam as viable in commercial terms rather than an act of charity that no business entity would undertake.

The news came on a day the government appointed three more directors on the board -- CII chief mentor Tarun Das, Institute of Chartered Accountants of India's former president T N Manoharan and LIC nominee Suryakant Balkrishna Mainak. The appointments are further expected to strengthen the new board's efforts at arranging funds.

"The first impression from the government-nominated directors is that Satyam's operations are sound and, by and large, major customers are willing to remain with the company," corporate affairs minister Prem Chand Gupta said after announcing the appointments on Thursday.

HDFC chairperson Deepak Parekh's announcement that rather than being completely in the red, Satyam's receivables stood at Rs 1,700 crore was greeted with cautious optimism by PMO. Though it needed to be seen how soon these funds would come into Satyam's coffers and what outstandings to banks were, it was felt that the IT giant may not need as much assistance at all. "The figure seems to tally with working capital needs," said sources.

The government's optimism stemmed from a meeting earlier in the day between Gupta and Parekh, the senior-most member in the board. Parekh also met Planning Commission deputy chairperson Montek Singh Ahluwalia to brief him about Satyam's revival roadmap.

After his meeting with Gupta, Parekh said the company had "healthy receivables" and pegged them at Rs 1,700 crore. This exceeds the Rs 1,100 crore quoted by B Ramalinga Raju, Satyam's fallen promoter who had plunged the company into a deep crisis when he owned up to having defrauded the company by cooking up books and siphoning money, perhaps for years.

Indeed, it now turns out that if anything, Raju was at least being truthful about the receivables.

Buoyed by the higher quantum of receivables, which will help bolster confidence of possible lenders, Parekh told TOI the Satyam board was open to inducting "strategic investors" as part of its strategy to revive the company. "There are many options in front of us. Yes, strategic investors is one of the options."

The board's confidence level too seemed to be going up along with the rise in the quantum of receivables. Parekh went as far as to say Satyam had the ability to even manage without an immediate bailout from the government. "It is a running company, is is an ongoing company," he said, stressing that they had the ability to pay salaries.

Coming a day after the news that Satyam paid $25-30 million as health insurance premium for its employees in the US, Parekh's words on higher receivables will lend weight to the new board's search for strategic investors and instil confidence among key financial institutions and banks to look at Satyam more positively.

[dwarakesh]

Pricewaterhouse gave wrong PAN to Satyam

The Satyam saga gets murkier. Now it has come to light that its auditor, Pricewaterhouse, furnished the company with a "wrong" PAN. Confirming this Institute of Chartered Accountants of India (ICAI) has said it would take "disciplinary action" against the auditors and may even consider cancelling its licence.

On Thursday, TOI mailed ICAI vice chairman Uttam Prakash Agarwal balance sheets of Satyam Computers that quoted PwC Hyderabad's PAN. Agarwal is heading the high power committee set up by ICAI to probe into the Satyam fiasco. As it turned out, the PAN was that of PwC Bangalore. PwC Hyderabad technically comes under PwC New Delhi. As per ICAI records and website, PwC Jubilee Hills office is listed under New Delhi 'Northern Region', with the firm registration number given as '012754N'.

The PAN reflected in Form 23 AC (used for filling a company's balance sheet and other documents with the Registrar) of Satyam Computers is that of PwC, Bangalore. After going through the documents, Uttam Prakash Agarwal told TOI, "The PAN (on the balance sheets of Satyam is wrong and our disciplinary committee is now working on it. Since a case is already been filed against PwC, we can't file a fresh case. But this (the documents) makes our case stronger. Depending on the extent of error, we shall decide upon a punishment, with the maximum being cancellation of PwC's licence."

But PwC's woes do not end here. Agarwal says ICAI will also issue notices to S Gopalakrishnan, Talluri Srinivas and Ramakrishna P for signing as PwC partners when they technically are partners with Lovelock & Lewes. PwC had acquired Lovelock & Lewes a decade ago. Though PwC became the public face of Lovelock & Lewes and those who work for the latter are considered as employees of PwC, it technically is a 'PwC network firm in India' and has a separate PAN. "As Lovelock & Lewes partners, the three cannot sign anything on behalf of PwC. Following their reports, notices will be issued to these people," Agarwal said.

Agarwal's statement comes even as chartered accountants in Hyderabad are planning to go to town with similar allegations against the global auditing firm. Sunil Appaji, a senior CA from Hyderabad has written to ICAI saying Hyderabad is a branch of PwC, New Delhi. "When PWC Bangalore has nothing to do with PwC, Hyderabad, then how can the PAN be that of Bangalore and that too when the address stated below is that of Hyderabad. This means that the form was filled in the name of a bogus company," says Appaji.

[dwarakesh]

Mynampati sends SoS to govt for Rs 150 cr urgent relief

Satyam Computer has informed the government that it urgently needs Rs 150 crore to meet staff-related expenses, but official aid appears unlikely with a key minister today saying the firm's new board will arrange funds.

"The company has not asked for any package, they may not need that. They have not sent (request) for a package. If they require, they will raise it from bank," Corporate Affairs Minister Prem Chand Gupta told reporters here.

Satyam's senior executive Ram Mynampati, however, did send an SoS to Economic Affairs Secretary, saying Rs 150 crore was required to meet the health insurance liabilities of the company's employees in the US.

"We have received a mail or two from Mynampati. They indicated that they would need something of the order of Rs 150 crore...," Economic Affairs Secretary Ashok Chawla said.

He did not say when the mails were received. Mynampati is in the US to meet with clients.

The new board appointed by the government to run Satyam, which is struggling to get back on its feet after the disclosure of a Rs 7,800 crore fraud by its founder Ramalinga Raju, has identified tying up funds as a priority.

"It is a private sector company. There is a board in place which consists of eminent people. They know how to run a company... They have to work out how to finance the company's operations," Gupta said.

He said Satyam's board will manage the operations.

Earlier in the day, Chawla said there is no immediate plan for a government bailout for Satyam, although Commerce and Industry Minister Kamal Nath had indicated that the government may extend financial support to the company.

"Not at this stage," Chawla said when asked if the government would offer any bailout to the IT firm now.

[nithyasubramanian]

Raju may have owned up to escape jail term in US case

Ramalinga Raju, lodged in Chanchalguda jail, choose to confess about his alleged financial bungling to avoid appearing before a court in the US fearing arrest?

Raju, his brother Ram Raju and former CFO Srinivas Vadlamani, were to appear before the Texas District Court to defend themselves against charges of fraud, forgery and breach of contract filed by a British mobile solution firm Upaid.

The trio was directed to appear before the court on January 8, a day after Raju's stunning confessions unravelling India's biggest corporate fraud. A lawyer, instead, represented them as all of them went into hiding.

Upaid has already won the case in a lower court, against which Satyam has appealed in a higher court.

Legal experts say Raju and his accomplices could be jailed for at least 25 years under the US law for the offences they are alleged to have committed, if they lose the appeal.

The only way he could have escaped being transported to the US was if there was a case in India against him, which needed presence in Indian courts, experts said.

"The confession based on partial truth seems to be a deliberate attempt to avoid a long sentence in an American jail," said corporate law expert B Sai Chandravadhan.

Former Chief Justice of India P.N. Bhagwati said unlike in India, a jail term in the US does not run concurrently — the term for each offence has to be served separately. "It appears the confessional statement in India was in anticipation to the jail term that awaits him in America," Bhagwati said. "He seems to have acted on legal advice."

An Indo-US extradition treaty, signed in 1997, makes it impossible for Raju to escape the jail term there. Legal experts said it remains to be seen how far his delaying tactics, if correct, would succeed.

courtesy : Hindustan Times.

[nithyasubramanian]

Court to hear Raju's bail plea till today

Hyderabad, Jan 16: A court here on Friday will hear the bail plea of disgraced Satyam founder Ramalinga Raja and his brother Rama Raju and former CFO of the company Vadlamani Srinivas.

Earlier, the court of 6th Chief Metropolitan Magistrate also deferred hearing till January 16 market regulator SEBI's plea for recording a statement of Raju.

CB-CID also moved an application seeking police remand of accused, which will also be heard today.

Besides Raju and his brother, Satyam's ex-CFO Vadlamani Srinivas too is in judicial custody till January 23 and all are lodged in the Chanchalguda central prison.

Yesterday, Andhra Pradesh CID officials said that they have retrieved crucial information from the laptops, hard-disks and various documents seized during the raids conducted at the offices of scam-ridden Satyam Computer Services.

Raids were also conducted at the residences of Satyam's former chairman B Ramalinga Raju, his brother and former MD Rama Raju and ex-CFO Vadlamani Srinivas on January 11 and 12.

The investigating agency is likely to quiz a top executive and three directors of the firm's disbanded Board in a day or two to get further information about the scam.

courtesy : Zeenews.com

[nithyasubramanian]

Satyam denies top executives fled India

HYDERABAD: Fraud-hit Satyam Computer Services Thursday denied that its top executives had fled the country.
The IT bellwether termed as "malicious" reports in a section of media that its executives Ram Mynampati, Virender Aggarwal and Keshab Panda left the country to avoid questioning by authorities investigating the Rs.70 billion ($1.43 billion) fraud.
"In fact, Dr. Panda remains in India, while Mr. Mynampati and Mr. Aggarwal have returned to the US and Singapore, respectively, where they are based," a statement said.
"Satyam generates 97 percent of its revenues from outside of India. These executives are currently meeting with customers in their regions to personally assure them of our ongoing commitment.
"Satyam continues to serve its customers with excellence, and has received many expressions of confidence and support from clients, due to these efforts."
The company said these executives remain in constant contact with Satyam's board of directors and were available to authorities. "Satyam is cooperating fully with all ongoing investigations," it added.

courtesy : ExpressBuzz

[nithyasubramanian]

Body of Andhra's slain engineer being sent to India

Washington : As police investigated the murder of a software engineer from Hyderabad in the US, the Indian consulate in Houston sent an official to Little Rock, Arkansas to help arrange the transfer of the body to India.
The body of Akshay Vishal, an employee of fraud-hit Satyam Computer Services Limited who was on contract with US company Jet Falcon, has been sent for autopsy. His company has also undertaken to send the body back to India.
Indian officials are in touch with Vishal's family, his company and the authorities. A consul from the Indian consulate in Houston is expected to reach Little Rock where the incident took place to coordinate with the local authorities.
The 26-year-old engineer was allegedly shot by some unidentified gunmen Tuesday while he was getting into a car. Profusely bleeding, he was rushed to a hospital but succumbed to his injuries.
Vishal is the seventh person from Andhra Pradesh to be killed in the US since December 2007.

courtesy : Express Buzz

[nithyasubramanian]

Government expands Satyam board, says no bail out

HYDERABAD: The government on Thursday appointed three new members to the board of embattled Satyam Computer Services, but said it was not considering bailing out the fraud-hit outsourcing firm.

Satyam, India's No. 4 software services exporter, has been battling for survival since founder Ramalinga Raju resigned as chairman last week, saying profits had been falsified for years and $1 billion of cash and bank balances did not exist.

As the government talked down a state rescue, Deepak Parekh, a respected banker drafted on to the board by the government, said the firm had 17 billion rupees ($350 million) in receivables and might not need financial help if payments arrived on time.

"We are trying our best to salvage (the firm)," Parekh told reporters in New Delhi.
The government, which dissolved Satyam's previous board last Friday, doubled the size of its replacement, adding three new directors as it works to limit the damage from India's biggest corporate scandal.

Company Affairs Minister Prem Chand Gupta said Satyam had not sought state aid, and if the firm needed funds, it would raise them from banks.

"The first impression from the government nominee directors about the company is that its operations are sound and by and large major customers are willing to remain with the company," he said.

Another senior government official, Economic Affairs Secretary Ashok Chawla, said there were no present plans for "any direct support or bailout".

Satyam shares had slumped by about a third early on Thursday after one member of the new board, Kiran Karnik, ruled out accepting government money as this would send a wrong signal.
Local media reports had earlier estimated the government would pump in about 20 billion rupees to keep the firm afloat and reassure nervous clients and employees.

Gupta said more board members would be appointed if needed. The board will meet again on Saturday, Parekh said.

AUDITORS TO RESTATE

Satyam counts corporate giants such as Nestle and General Electric as clients. It has not said it has lost any customers over the fraud, but was already under pressure before the scandal as recession stalked its key markets.
Satyam shares lost 32.2 percent to close at 20.30 rupees, while the main stock index fell 3.45 percent. Satyam's market value has dived to about $280 million from more than $7 billion in mid-2008.

A senior official at Tata Consultancy Services Ltd, India's leading outsourcing firm, said on Thursday his company had been approached by some of Satyam's clients.

"We are not in talks with their clients actively. The question was, whether they are calling us. They definitely are," TCS Chief Operating Officer N. Chandrasekaran said.
TCS shares fell 5.3 percent on Thursday. After market hours it reported a lower-than-expected 1.6 percent rise in net profit.

Satyam has appointed KPMG and Deloitte as its new auditors to examine the full extent of the fraud, find out how much cash it really has and to restate its financial results.
Parekh said the new auditors would restate financials in 8-12 weeks. Analysts have warned that raising funds would not be easy in the meantime.
"Until this is done, any financial aid for the company from banks or financial institutions is unlikely," said Sudin Apte, country head of market researcher Forrester.
"In that sense, the uncertainty for Satyam continues."
Shares in rivals Infosys Technologies and Wipro also fell after one of their clients, Nortel Networks Corp, filed for bankruptcy.
Analysts said Nortel's work contributed only a small portion of revenue for the outsourcers, but the news was another blow to the export-driven companies hit by the global economic turmoil.

BOARD EXPANDED

The three men added to the new Satyam board on Thursday were Tarun Das, chief mentor of leading industry lobby Confederation of Indian Industry (CII), T.N. Manoharan, a former president of the Institute of Chartered Accountants of India, and S. Balakrishnan of state-run insurer LIC.
Parekh, Karnik and C. Achuthan, a former member of the markets regulator, were appointed as board members last Sunday.

Raju, his brother and the company's former chief financial officer are being held in jail in Hyderabad, home to Satyam's headquarters, charged with criminal conspiracy and forgery.

courtesy : Express Buzz

[nithyasubramanian]

Our reliance was on management controls over financial reporting: Price Waterhouse

HYDERABAD: Price Waterhouse has informed Satyam Computer Services Limited that its audit reports and opinions in relation to the financial statements of the company should no longer be relied upon, in view of the contents of the letter written by former Chairman B. Ramalinga Raju to his Board of Directors.

In a communication sent to Satyam on Tuesday, it referred to Mr. Raju's letter stating that the financial statements had been inaccurate for successive years. Even if these were partially accurate, they might have a material effect on the veracity of the statements for the audit period from June 2000 to September 2008. The effect was currently unknown and could not be quantified without a thorough investigation.

"Consequently, our opinions on the financial statements may be rendered inaccurate and unreliable," it added.

Price Waterhouse said the financial statements for the period were prepared by the management. On its part, it planned and performed the required audit procedures on the statements and examined the books and records produced before them by the management.

"We placed reliance on management controls over financial reporting and the information and explanations provided by the management, as also the verbal and written representations made to us during the course of our audits".

Price Waterhouse referred to a guidance note issued by the Institute of Chartered Accountants of India (ICAI) on revision of audit reports in January 2003 which prescribed steps to be followed by the auditors to prevent reliance on audit reports in such circumstances. Hence, this advisory.

Such a requirement was also prescribed under the accounting standards in the United States where Satyam's American Depository Receipts were listed.

"We wish to inform you that pursuant to Section 19A of the United States Securities Exchange Act of 1934, the information contained in the Chairman's letter indicates that an illegal act could have occurred," said the auditing firm and advised the Satyam Board to promptly commence an independent investigation pursuant to the U.S. laws.

"We hope to work with the company and provide necessary assistance to the new Board" to address any issues arising out of the investigations to fulfil the statutory obligations.

courtesy : The Hindu.

[nithyasubramanian]

SFIO team meets CID brass

HYDERABAD: A team of the Serious Fraud Investigation Office (SFIO) on Thursday examined the records available with the Crime Investigation Department (CID) of Andhra Pradesh Police as part of its ongoing probe into the multi-crore fraud in Satyam Computer Services Limited.

The CID is in possession of a large volume of records and documents which it seized from the company during raids over the last one week.

Led by SFIO Additional Director K.V.S. Singh, the team held a detailed meeting with CID Additional Director-General A. Siva Narayana and other officials. Apart from SFIO, which is the latest to join the investigations, the Securities and Exchange Board of India (SEBI) and the Registrar of Companies (RoC) are the other agencies coordinating with the CID in probing affairs of the company.

A senior official told The Hindu that SEBI would register cases against Satyam ex-chairman B. Ramalinga Raju about his role in the scam and offloading of shares at critical junctures, which could be construed as insider trading.

The RoC would seek to prosecute him, under the Indian Companies Act, for alleged fraud by way of falsification of account books and publishing of false financial statements.

Officials said the CID would soon arrest middle-level managers of Satyam who helped the top management in fudging the accounts.

The CID application seeking police custody of Mr. Ramalinga Raju, his brother and the former Managing Director, B. Rama Raju, and the former Chief Financial Officer, Srinivas Vadlamani, will be heard by a court on Friday.

The Board of Directors of Satyam appointed Deloitte and KPMG to assist the Board in the restatement of accounts. The two auditing firms, however, declined to specify the cut-off year from which they would look into the accounts of Satyam Computer an issue that gains importance because of Mr. Raju's confession that the accounts had been fudged for seven years.

courtesy : The Hindu.

[nithyasubramanian]

Satyam episode: SEBI enquiries will focus on three areas

Investigating authority to furnish its report at the earliest

'No notice to the persons to be investigated should be given'

MUMBAI: The Securities and Exchange Board of India (SEBI) would be making crucial enquiries on tainted Satyam Computer Services on three counts: insider trading, fraudulent and unfair trade practices and other disclosures under its various regulations.

The market regulator's plea for permission to record the statement of Satyam founder B. Ramalinga Raju and others will come up for hearing on Friday.

While the Government on Tuesday asked its Serious Frauds Investigation Office (SFIO), a body set up to crack complex white collar crimes, to probe the financial irregularities in Satyam Computer Services and report its findings in three months, the market regulator asked its investigating authority to furnish its report at the earliest. "In the interest of investors and public interest" SEBI had stated that the regulator would "investigate into the affairs relating to buying, selling or dealing in the shares of Satyam Computer Services and more particularly to ascertain whether the provisions of the SEBI Act, 1992, and its Rules and Regulations have been violated."

SEBI would enquire into whether there are any circumstances which would render any person guilty of having contravened any of the regulations of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003; whether any provision of the SEBI (Prohibition of Insider Trading) Regulations, 1992 has been violated by any person; whether any merchant banker is guilty of having contravened the provisions of the SEBI (Merchant Bankers) Rules and Regulations, 1992; whether any violation of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 has taken place; whether any violation of Securities Contract (Regulations) Act, 1956 and Rules and Notifications made there under has taken place.

While appointing A. Sunil Kumar, General Manager of SEBI, as the investigating authority SEBI stated that no notice to the persons to be investigated should be given and, therefore, it is ordered that in terms of the provisions of the regulations the investigation would be conducted without notice.

"It shall be obligatory upon the persons being investigated to extend cooperation and furnish such information and material as may be required by the investigating authority in accordance with the regulations referred herein."

Powers of authority
While giving various powers for the investigating authority, SEBI regulations also give power to the investigating authority "to make an application to the Judicial Magistrate of the first class having jurisdiction for an order for the seizure of any books, registers, other documents and record, if in the course of investigation, the investigating authority has reasonable ground to believe that such books, registers, other documents and record of, or relating to, any intermediary or any person associated with securities market in any manner may be destroyed, mutilated, altered, falsified or secreted."

There was across the board selling by investors, including institutional investors such as domestic mutual funds since mid-December 2008 till the first week of January 2009, according to market participants.

Under Fraudulent and Unfair Trade Practices Regulation of the Securities and Exchange Board of India, fraud also includes an active concealment of a fact by a person having knowledge or belief of the fact; a promise made without any intention of performing it; a representation made in a reckless and careless manner whether it be true or false; any such act or omission as any other law specifically declares to be fraudulent, and deceptive behaviour by a person depriving another of informed consent or full participation.

courtesy : The Hindu.

[nithyasubramanian]

CPI(M) seeks probe into Maytas projects

NEW DELHI: The Communist Party of India (Marxist) has raised questions over the role of the Maytas group in Andhra Pradesh and demanded that the Prime Minister order a probe into the various projects sanctioned to the companies by the State government as also into the affairs of these entities.

The CPI(M) Polit Bureau, in a statement on Wednesday, said it was necessary to examine the business dealings and finances of Maytas Infra Ltd. and Maytas Properties Ltd.

The Maytas companies were given contracts worth over Rs. 30,000 crore by the Andhra Pradesh government and they had accumulated huge land assets. The statement cited the Rs. 12,200-crore Hyderabad Metro Project.

"It has come to light now that the Managing Director of the Delhi Metro Rail Corporation (DMRC) had written to the Deputy Chairman of the Planning Commission in September 2008, protesting against the PPP model adopted in the case of the Hyderabad Metro, whereas 296 acres of prime land was made available to the BoT operator for commercial exploitation," the statement said.

The DMRC Managing Director also warned of a "hidden agenda" of the developer to "extend the Metro network to a large tract of his private land holdings so as to reap a windfall profit of four to five times the land price."

The CPI(M) said objections raised by DMRC chief E. Sreedharan on this contract led to the DMRC's removal as project consultant.

courtesy : The Hindu.

[nithyasubramanian]

Ramalinga Raju spends time reading

HYDERABAD: The disgraced former Chairman of Satyam Computer Services, B. Ramalinga Raju, is leading a secluded life at Chanchalguda Jail ever since he was remanded to judicial custody. Fellow prisoners are also not taking any initiative to strike a conversation with him after seeing his photographs in newspapers.

"He is not mingling with anyone," jail officials said. Company CFO Vadlamani Srinivas was also lodged in the same lockup. Mr. Raju is spending time mostly reading books on business and spirituality, apart from newspapers and biographies. The former chief of Satyam is in no mood to interact with anyone in the jail.

Ramalinga Raju's son Teja Raju and advocate S. Bharat Kumar are regularly meeting him and updating him about the status of the petition for bail. Close relatives of Srinivas also met him at the jail. "We are giving 30-minute permission to relatives to meet the Raju duoduring 'mulakhats'," said Chanchalguda in-charge Jailor Newton.

Meanwhile, the bail petition filed by Mr. Raju's advocate, CID's petition seeking his police custody and SEBI's petition seeking permission to record his statement will come up for hearing in the Nampally Criminal Court on Friday.

courtesy : The Hindu.

[nithyasubramanian]

The worst is over, feel Satyam employees

CHENNAI: Satyam employees in the city are slowly coming to terms with the initial shock they received on learning that founder B Ramalinga Raju doctored the company's balance sheet. They now feel that that the company can be revived even without the Centre's bailout package.
Earlier the employees were clueless about the financial mess in the company until it surfaced in the media. But now, the management of Satyam, which has 15,000 employees in Chennai, is holding regular interactions with them to address their concerns.
In the 'doubt clearing sessions', the employees are also briefed on the latest developments and given updates relating to the scam.
As Satish (name changed) says: "Initially all of us were shattered. But now we have accepted the situation and are prepared to take it in our stride. In fact, such things do happen at various organisations.
I don't think there is any point in pressing the panic button." He agrees that the 'doubt clearing sessions' helped them all.
Initially, nobody understood what was going on.
Satish and his friends did sense that something was wrong as many top executives had put in their papers. Their doubts were confirmed after the sensational confession of Ramalinga Raju.
"One person's fraud doesn't make Satyam invisible. Satyam was not built by just one person; it includes individuals, our clients, customers and employees," says Jose Elanjical, who is with the Global Marketing and Communication section of the company. He blames the media for creating negative vibes about the company.
When asked about a possible bailout by the government, the employees felt it was not needed.
"The quick involvement of the government itself shows that there is going to be a revival. Today we have the best people on our board," says Jose.
The employees this reporter to expect most staffers to stick on to the company, as "there is a lot of unity and synergy within the team." They too have no plans of calling it quits.

courtesy : Express Buzz

[nithyasubramanian]

Sombre mood in Ramalinga Raju's ancestral village

GARAGAPARRU (WEST GODAVARI DISTRICT): This ancestral village of the tainted Satyam Computers former chief Byrraju Ramalinga Raju, tucked away in West Godavari district, seemed missing all the fun and grandeur associated with Sankranti celebrations.

Instead, the habitation plunged into a state of mourning with several flex boards carrying the pictures of Mr. Ramalinga Raju depicting him as 'Raraju' (king of kings) hung up at all the vantage points as an expression of solidarity for the duo behind the bars for their involvement in a multi-billion scam. A sense of gloom takes precedence over festive mood in the households of Kshatriya community to which the Raju brothers belong. The village, which used to be the centre stage for cockfights, beckoning the who's who of the community settled within and outside the country, is now gripped by eerie silence. "We are in no celebration mood," Vegesna Bangaru Raju told this correspondent. This village apart, Kshatriyas in and around Bhimavaram offered prayers in temples and undertook fast during the festival, seeking divine help to the Raju family to come out of the difficult phase and regain its past glory.

Heroic figure

Mr. Ramalinga Raju had the practice of keeping himself away from his busy IT world for a while and staying in his native ancestral village for a fortnight during every Sankranti. Ravi Varma, a Hyderabad-based computer professional who came to his village on Sankranti vacation, said the village still regarded him as a hero regardless of his involvement in a grave economic offence which shook the IT world. Kshatriya Seva Samiti has decided to mobilise support from within and outside the Kshatriya community in favour of the Raju family. As part of the endeavour, a silent procession is proposed to be held at Bhimavaram on January 19.

According to B. Balaram, CPI (M) district secretariat member, the pressure from within the Kshatriya community was so intense that he was denied social contact by his relatives and friends in the community for his failure to toe the line of the Kshatriya Seva Samiti.

[nithyasubramanian]

CID officials collect information from seized Satyam devices

Hyderabad (PTI): Andhra Pradesh CID officials are retrieving crucial information from the laptops, hard-disk's and various documents, seized during raids conducted at the offices of the scam-ridden Satyam Computers, to unravel the fraud in the firm.

The raids were conducted at the residences of Satyam's former chairman B Ramalinga Raju, his brother and former MD Rama Raju and ex-CFO Vadlamani Srinivas on January 11 and 12.

The officials are also taking the help of accounting professionals to understand the details of the issue, a senior officer probing the case said.

"We are working day and night on the issue. The probe will take time given the magnitude of the matter," he said.

Meanwhile, the CID is likely to quiz a top executive and three directors of the firm's disbanded Board in a day or two to get further information about the scam, he said.

"We are waiting for tomorrow's court decision where bail petitions of former chairman of Satyam B Ramalinga Raju, his brother and former MD Rama Raju and ex-CFO Vadlamani Srinivas will come up along with SEBI's plea for quizzing Raju and CID petition seeking their police custody," he said.

"We are coordinating with other probe agencies like SEBI and SFIO and exchanging information," he said.

CID officials held a two-hour-long meeting on Thursday to take stock of the situation.

courtesy : The Hindu.

[nithyasubramanian]

Price Waterhouse can't distance itself from Satyam fiasco: ICAI

New Delhi (PTI): Chartered accountants regulator ICAI on Thursday questioned the role of Satyam's statutory auditor Price Waterhouse, saying the bookkeeper cannot dissociate itself from the IT company's accounting fiasco.

Price Waterhouse, auditors of Satyam for over eight years, had on Thursday said that its audit of the company's financials could be "inaccurate and unreliable" in view of the financial irregularities disclosed by Ramalinga Raju.

"This does not absolve them of the defaults already committed, if any," ICAI President Ved Jain told reporters here.

ICAI had earlier issued a showcause notice to PwC on the issue.

Price Waterhouse had said that all those financial statements were prepared by the management and that it relied "on management controls over financial reporting, and the information and explanations provided by the management, as also the verbal and written representations made to us during the course of our audits."

Satyam as well as Price Waterhouse are the subject of regulatory and government investigation into the country's biggest corporate fraud - involving Rs 7,800 crore - disclosed by Satyam founder Ramalinga Raju. Raju, his brother Rama Raju and Satyam CFO Vadlamani Srinivas are in judicial custody now.

courtesy : The Hindu.

[Kalyan]

Satyam may get lifeline

After over a week of bad news, there appears to be some light at the end of the Satyam tunnel. The IT major has received assurances of financial lifelines from lending institutions, while its new board raised hopes that the firm's finances are not as dire as feared with its quantum of receivables being a healthy Rs 1,700 crore.

    The government-appointed board said it is open to taking on "strategic investors". The good tidings on its finances might make potential "white
angels" see an engagement with Satyam as viable in commercial terms rather than an act of charity that no business entity would undertake.
    The news came on a day the government appointed three more directors on the board: CII chief mentor Tarun Das, former ICAI president T N Manoharan and LIC nominee Suryakant Balkrishna Mainak. The appointments are further expected to strengthen the new board's efforts at arranging funds.

    "The first impression from the government-nominated directors is that Satyam's operations are sound and, by and large, major customers are willing to remain with the company," corporate affairs minister Prem Chand Gupta said after announcing the appointments on Thursday.
    HDFC chairperson Deepak Parekh's announcement that rather than being completely in the red, Satyam's receivables stand at Rs 1,700 crore was greeted with cautious optimism by the PMO. Though it needs to be seen how soon these funds would come into Satyam's coffers, and what outstandings to banks are, it is felt that the IT giant may not need as much assistance at all. "The figure seems to tally with working capital needs," said sources.

    The government's optimism stemmed from a meeting earlier in the day between Gupta and Parekh, the senior-most member on the board. Parekh also met Planning Commission deputy chairperson Montek Singh Ahluwalia to brief him about Satyam's revival roadmap.

    After his meeting with Gupta, Parekh said the company has "healthy receivables" and pegged them at Rs 1,700 crore. This exceeds the Rs 1,100 crore quoted by B Ramalinga Raju, Satyam's fallen promoter who had plunged the company into a deep crisis when he owned up to having defrauded the company by cooking up books and siphoning money, perhaps for years. Indeed, it now turns out that if anything, Raju was at least being truthful about the receivables.

    Buoyed by the higher quantum of receivables, Parekh said the Satyam board is open to inducting "strategic investors" as part of its strategy to revive the company. "There are many options in front of us. Yes, strategic investors is one of the options."

source : timesofindia

[nithyasubramanian]

Satyam fiasco: Court begins hearing on Raju's bail plea

Hyderabad, Jan 16: The bail petition of Satyam Computer's former Chairman B Ramalinga Raju will come up for discussion before the Sixth Metropolitan Magistrate court here on Friday.

he petition will be argued by four senior lawyers on behalf of Ramalinga Raju and two others, Ramalinga Raju's advocate Bharat Kumar told reporters.

However, Kumar refused to divulge on which grounds the bail petition was filed, but said there is a strong basis to the petition.

Ramalinga Raju and his brother Rama Raju were arrested by the Andhra police on January 9 and were sent to judicial custody till January 23 on charges of financial fraud to the tune of Rs 7,800 crore.

They were booked under IPC Sections 120 B (criminal conspiracy), 420 (cheating), 409 (criminal breach of trust), 468 (forgery) and 471 (falsification of records). All these charges are non-bailable offences.

The local court will also take up the petition filed by Sebi seeking permission to interrogate Ramalinga Raju in the same case.

SEBI had summoned Ramalinga Raju to appear before its officials with records and documents on January 9, but Bharat Kumar had represented the former Satyam Computer Chairman.

Sources say that SEBI's probe is focusing more on insider trading, and fraudulent and unfair trade practices, besides non-disclosures under various regulations in the SEBI Act.

courtesy : Zeenews.com

[nithyasubramanian]

Suspect arrested for Satyam staffer's murder in US

WASHINGTON: A 20-year old man "strongly suspected" to have killed an Indian-techie, working with the scam-hit Satyam Computers, was arrested by the police in Arkansas state of the US.

The Little Rock Police are interrogating the suspect in connection with the killing of Andhra Pradesh engineer Akshay Vishal, who was shot dead on Tuesday, in the seventh case of young students and professionals from the state being killed in the last 14 months.

Name and other details of the arrested suspected assailant have not been released yet by the police, however the local media identified the arrested person as 20-year-old Brandon Johnson.

"We have been interviewing him (arrested person suspected of carrying out the murder) all day today," an official of Little Rock City Police Department said on condition of anonymity, as he is not authorized to speak to the media.

"He is a strong suspect (of the murder)," the official said, adding that three search warrants have also been issued in past two days.

"The person, who we believe did it (the murder), is right here (arrested), but we are not releasing the details as investigation is still going on. We can't release any more detail at this point of time," the official said.

The police, who have been carrying an intensive investigation into the murder of Vishal, said more than a dozen people have been interrogated so far as part of the investigation.

Robbery is believed to be the prime motive behind the murder, investigations so far have revealed, the police said.

The police said the same night one more individual was murdered. "We are trying to investigate if there is any link between the two or both the different," the officials said.

Meanwhile local Little Rock media reported that Johnson has been involved in as many as 12 robberies and three murders in the past one month. Of these two of the murders, including that of Vishal, happened on the same day.

Vishal, 26, who came to the US from India, worked with Dessault Falcon Jet on behalf of Satyam. His neighbours said he lived with his girlfriend, who called the police after he was shot at by the assailant. A profusely bleeding Vishal was taken to hospital, where he later died.

Meanwhile, the Indian Consulate in Houston has dispatched a senior official to help local authorities arrange quick transfer of body to India.

The killing is the latest one in the series of murders of Indian students and professionals in the US.

Arpana B Jinaga, an IT engineer in Seattle was found dead in her apartment on November 3 while an engineering student in Southern Illionis University T Soumya Reddy was found murdered in September. Her cousin Vikram Reddy, also a software engineer in Chicago, was also found dead nearby.

courtesy : The Times of India.

[nithyasubramanian]

No mention of India salary in email from Satyam HR

On Thursday, a mail from HR head of Satyam, S V Krishnan, stating that the payroll cycle for mid-January 2009 for US associates would go ahead as scheduled  couldn't lift spirits of the employees, who were scanning the mail for any mention of associates' salary in India.

Krishnan wrote in his mail, "In addition to relieving concerns of our associates, this news should also be reassuring to many of our customers, who were worried about the impact of the media reports on the morale and productivity of our associates." However, while some employees did agree that US associates getting their fortnight package was encouraging news since it indicated the company had some money, the conspicuous absence of January salary's mention had them worried.

"There is no mention about our salaries anywhere neither in the mail and we do not want such pleasant communications anymore. Tell us in black and white how the company would pay us this month, if at all it can," said a worried senior associate adding that after his colleagues read the mail, they frantically started calling their former colleagues, batchmates from engineering colleges and friends to figure out opening in other firms.

"Office atmosphere is tensed and mood of associates is very low," another employee said. The backslapping, jokes at the office corridors and even crowding around the television sets around the cafeteria have become activities that no

Satyamite seems keen on indulging in. The worried associates say they are preparing themselves for the worst, that is, a blank on January 31 when they are supposed to get their monthly pay cheques.

courtesy : The Times of India.

[Kalyan]

The new board of fraud-hit Satyam Computer Services will meet again on Saturday to look for ways to raise new funds after both the
government and the company rejected talk of a state rescue bid.

Satyam, India's No. 4 software services exporter, has been battling for survival since chairman Ramalinga Raju suddenly resigned last week, revealing profits had been falsified for years and that $1 billion of cash on the books did not exist.

Media speculation of government aid has mounted as analysts questioned whether India's biggest corporate fraud had left the outsourcing firm with enough money to pay its 50,000 staff.

But Economic Affairs Secretary Ashok Chawla told reporters on Thursday that the government was not looking at any direct support for the company or bailout "at this stage."

Deepak Parekh, a senior banker and Satyam board member, said it had Rs 17 billion ($348 million) in receivables and may not need new funding if the money came in on time.

But Parekh added the board would consider bank loans if necessary.

The government, which dissolved Satyam's previous board last week, appointed three new directors on Sunday and another three late on Thursday to help steer the company out of crisis.

Company Affairs Minister Prem Chand Gupta said the first impression from the new directors about the company is that its operations are sound and that "by and large" major customers were willing to remain with the firm.

"All these are steps in the right direction ... but they need to get a CEO and CFO in place first to run the company's daily operations. That should be a priority," said Gajendra Nagpal, chief executive of Unicon Financial.

Satyam's shares jumped as much as 40 percent on Friday to 28.40 rupees after the government doubled the size of the board, but the stock has still lost over 80 percent of its value since the massive fraud was revealed.

Many questions about the accounting scandal remain to be answered: how large is it, who benefited, and how did the perpetrators manage to conceal it for so long?

Even if Satyam escapes a near-term cash crunch, it faces a long road to recovery.

The new board will have to keep clients from defecting to Satyam's rivals, fend off a growing number of lawsuits over the scandal and try to rebuild investor trust.

Lazard Asset Management said in a notice to the stock exchange on Friday it had sold all of its 5.3 percent holding in Satyam through open market transactions on Thursday.

Satyam's clients include corporate giants such as Nestle and General Electric.

Satyam's founder Raju, his brother who was the managing director of the company and the former chief financial officer have been charged and are being held in a jail.

Raju's lawyer Bharat Kumar said his bail application would be heard by a court on Friday.

source : economic times

[nithyasubramanian]

PM reviews Satyam case with Cabinet colleagues

New Delhi, Jan 13: Prime Minister Manmohan Singh today held an exhaustive meeting with top Cabinet colleagues, including Pranab Mukherjee and P Chidambaram, to explore all options to salvage the scam-tainted Satyam Computer.

"We are looking at different possibilities...," Corporate Affairs Minister Prem Chand Gupta emerging from the meeting told reporters.

Commerce and Industry Minister Kamal Nath, who had yesterday said that the government was open to consider a financial package for Satyam, and Planning Commission Deputy Chairman Monetk Singh Ahluwalia also attended the review meeting held a day after the first meeting of three-member government appointed board.

"We appraised the Prime Minister and other ministers of the situation and what action has been taken; what is being done and what will be done," Gupta told reporters.

After its first meeting yesterday, the government appointed Satyam board had clearly indicated that the liquiditycrucnh was an immediate priority to carry out business and restoring confidence of 53,000 strong employees and clients.

Today's meeting comes in the wake of the Centre ordering investigations into Satyam by Serious Fraud Investigation Office (SFIO).

Sources also said the issue of cash crunch figured during the review meeting. The government is yet to appoint more directors on the board of Satyam.

The Prime Minister yesterday asked Cabinet Secretary K M Chandrasekhar to take a coordinated action between various government agencies and regulators on Satyam issue.

He has already held discussions with SEBI Chairman C B Bhave on the developments.

courtesy : Zeenews.com

[nithyasubramanian]

The Satyam effect! Engineering aspirants ignoring IT sector

Chandigarh, Jan 15: The Satyam scandal, which has shattered the dreams of the company's employees, has a worse effect on aspirants from Punjab and Haryana, as they are not only keeping the Hyderabad-based firm out of their options, some of them are also shunning jobs in the IT sector as well.

Engineering students from the two states who were placed with Satyam Computer last year have now changed their minds and are aggressively looking for jobs in other IT firms as well as companies in other sectors following the disclosure of the biggest-ever corporate fraud by the company.

"I was offered a job as trainee employee at Satyam last year. But after the fiasco has happened at Satyam, I have changed my mind to get suitable job in other firm," said Divyadeep Goyal, a student Mechanical Engineering student of University Institute of Engineering and Technology (UEIT), who was offered an annual package of Rs 3.25 lakh in Satyam.

Echoing similar views, Sumant, another final-year student of the same college, said, "The impact of Satyam fraud has been so damaging that we now do not have any intention to join the IT company. Rather we will look for job in other sectors."

The total number of engineering students placed by Satyam from this region was not available but some colleges have shared their placement figures.

Almost 80 students from the Institute of Engineering and Technology were selected by Satyam last year, while 13 students were placed from Punjab Engineering College (PEC) and seven were from UIET.

Students were offered an annual package between Rs 3 lakh and 3.5 lakh.

According to placement officers of various colleges, engineering students are now looking at the core sector, comprising manufacturing and telecom sectors.

"This time we are witnessing a change in trend of students' preference towards job placements. They are now finding the core sector an appropriate one as far as employment is concerned," PEC Chief Placement Officer Saurabh Dhiman said.

But there are some job seekers who have kept Satyam as last option for employment.

"I intend to move into the core sector. But if I do not get job in any other sector then my last option will be to join Satyam as I am hearing from my friends that situation there will improve," said Harshal, a mechanical engineering student at PEC, who was offered a Rs 3.5-lakh package by Satyam.

courtesy : Zeenews.com

[nithyasubramanian]

Satyam: SEBI plea to quiz Raju deferred till Jan 19

Hyderabad, Jan 16: A court here on Friday deferred a decision on SEBI's petition to interrogate the disgraced Satyam founder B Ramalinga Raju till January 19.

SEBI (Securities and Exchange Bureau of India) has been trying to get access the Satyam founder since the huge account fraud came to light in January 7 this year.

The market regulator is focusing on insider trading, and fraudulent and unfair trade practices, besides non-disclosures under various regulations by Satyam under the SEBI Act.

According to media reports, Raju's lawyers have argued that there is no need of SEBI interrogation as the market regulator can approach the share transfer agencies for records.

Reportedly the CID, which is investigating the case, has not objected to SEBI petition to get access to Raju.

Meanwhile, the Sixth Metropolitan Magistrate court here is also hearing the bail petition of Ramalinga Raju.

The petition is being argued by four senior lawyers on behalf of Ramalinga Raju and two others, Ramalinga Raju's advocate Bharat Kumar told reporters.

However, Kumar refused to divulge on which grounds the bail petition was filed, but said there is a strong basis to the petition.

Ramalinga Raju and his brother Rama Raju were arrested by the Andhra police on January 9 and were sent to judicial custody till January 23 on charges of financial fraud to the tune of Rs 7,000 crore.

They were booked under IPC Sections 120 B (criminal conspiracy), 420 (cheating), 409 (criminal breach of trust), 468 (forgery) and 471 (falsification of records). All these charges are non-bailable offences.

courtesy Zeenews.com

[nithyasubramanian]

Satyam shares sink as bailout talk dashed

MUMBAI: Shares of Satyam Computer tumbled as much as 30 percent on Thursday after one of its directors dashed investor hopes for a government bailout of the fraud-stricken firm.
Satyam is a financially viable company, the Times of India newspaper said, quoting Kiran Karnik, one of three new directors appointed by the government after the company last week revealed India's biggest ever corporate scandal.
"Taking money from the government will send a wrong signal," Kiran Karnik told the paper, amid growing media speculation that the state will have to pump cash into the technology outsourcing company to ensure its survival.
The Times of India said raising funds from equity partners and banks was the top priority of the new board to meet working capital and pay salaries to staff.
Shares of Satyam plunged in early trade, dragging down India's main stock index. By 0500 GMT, the stock was down 22 percent at 23.30 rupees, after sinking as low as 20.55 rupees. India's benchmark stock index fell 3.5 percent.
"People are realising there is no bailout package. So people who have bought it before are dumping it," said Arun Kejriwal, director of Kris Research.
Local media had estimated the government may have to pump up to 20 billion rupees ($410 million) into Satyam to keep it afloat and reassure its nervous customers and employees.
Satyam has 53,000 workers and counts global corporate giants such as Nestle and General Electric as clients.
So far, it has not reported losing any customers over the billion-dollar fraud, but its business was already under pressure before the scandal as recession stalked many of its key markets, forcing companies to review or cut spending.
"It will take time for a proper recovery for the company, at least 2-3 months," said R.K. Gupta, managing director at Taurus Asset Management in New Delhi, who expects the stock to breach the previous low of 11.50 rupees it reached on Jan. 9.
Karnik, a former head of Indian lobby group National Association of Software and Services Companies, told the Times of India the company was a "very viable organisation" and would make a profit in a few months.
"Our only concern is to keep the show and hold on to the clients and the workers," he said.
Satyam appointed two new audit firms on Wednesday to examine the full extent of the fraud, find out how much cash it really has and restate its financial results.
The prime minister met key ministers on Tuesday to discuss Satyam, and corporate affairs minister PC Gupta later said "different possibilities" were being examined.
The board was working towards making Satyam financially viable before considering any sale or merger, the paper said.
Satyam's founder and chairman Ramalinga Raju quit last week after confessing profits had been falsely inflated for years.
Raju, 54, his brother and the company's former chief financial officer have been charged and are in custody in the southern Indian city of Hyderabad, where Satyam's headquarters is located.
The scandal has hit Indian stocks and the currency, as investors worried over the damage to foreign investment in Asia's third-largest economy and the once-booming outsourcing sector.
Satyam's stock market value has dived to less than $400 million from more than $7 billion six months ago.

courtesy : Express Buzz

[nithyasubramanian]

Did we refuse to see the Satyam lie?: DNA

Mumbai, Jan 16: In retrospect we are all wise. That is precisely what is happening with the Satyam scam as well.

The so-called experts are at it again, criticising Ramalinga Raju, his cronies and the auditors of Satyam, Price Waterhouse. But the irony isn't to be missed, considering a large number of them were bullish on Satyam till about a month back. They can't be faulted for venting there frustration at having been taken for a ride, of course. But they all got it wrong, right?

The question to ask now is how such a scam could go unnoticed for such a long time. Now Satyam is no ordinary company listed just on some local stock exchange. It is listed on the Bombay Stock Exchange, the National Stock Exchange and even the New York Stock Exchange (NYSE).

Disclosure requirements for being listed on the NYSE are very strong. Also, the so-called experts, analysts and even journalists have been tracking the company very closely for long now.

As is well-known by now, Raju has said that the cash on the books of Satyam was overstated to the extent of Rs 5,040 crore.

Satyam's balance sheet over the last six quarters clearly shows that the cash maintained as fixed deposit with banks was in the range of Rs 3,318-3,319 crore. Nobody raised eyebrows on the fact that over the last six quarters, the fixed deposits remained more or less constant.

Also, over the last six quarters, the company's current account deposits went up from Rs 600 crore to Rs 1,841 crore. Experts and analysts could well have asked why the company needed to keep so much money in current accounts, which do not pay any interest.

Sure, I have the benefit of hindsight in writing this, but I don't follow Satyam on a daily basis as the experts and analysts do. It's surprising nobody questioned anything. Charles Kindleberger's all-time classic Manias, Panics and Crashes may have an explanation: "Commercial and financial crisis are intimately bound up with transactions that overstep the confines of law and morality, shadowy though these confines be. The propensities to swindle and be swindled run parallel to the propensity to speculate during a boom. Crash and panic? induce still more to cheat in order to save themselves. And the signal for panic is often the revelation of some swindle, theft embezzlement or fraud."

Mark the sentence in bold font, which suggests that when the going is good, promoters have an incentive to swindle and people who follow these companies tend to switch off their brains.

That seems to have happened in the Satyam case as well.This was the case with Bernard Madoff, too.In fact, the similarity between the two fraudsters is uncanny. Madoff and Raju Madoff ran a Ponzi scheme for almost 50 years from 1960.

A Ponzi scheme is one where an illusion of successful performance is created by using the money brought in by newer investors to pay off existing ones. There is no business model in place to actually generate returns. So, a Ponzi scheme runs as long as the money entering the scheme is greater than the money leaving it.

And no one ever caught up with Madoff, until he admitted to it himself, last month. The losses on account of Madoff's scheme are expected to be around $50 billion. The returns Madoff delivered were superlative. In fact in November 2008, when the broader US market fell by almost 10%, Madoff's scheme did not lose any money. The 'good' performance kept investors hooked and even elicited approval and appreciation from experts.

Nobody seriously questioned anything, though some people did question the methods he used in the late 90s. Some even went on record saying they had tried using the methods he claimed to be using, but could not generate the same kind of returns. The same thing happened in case of the so-called experts following Raju and his company. They switched off their brains.

Why analysts fail to see it

Blame it on the 'halo effect', which the media builds up around businessmen and financial fraudsters.

Raju's case was no different. Magazines and newspapers wrote stories on him and painted him as a person who could do no wrong. This blinded investors and experts who followed the company.

Nassim Nicholas Taleb's book Fooled by Randomness offers some insight on the making of the halo effect: "We would get very interesting and helpful comments on his remarkable style, his incisive mind, and the influences that helped him achieve that success. Some analysts may attribute his achievement to precise elements among his childhood experiences. His biographer will dwell on the wonderful role models provided by his parents; we would be supplied with black and white pictures in the middle of the book of a great mind in the making."

Take the case of Enron's Kenneth Lay and Jeffrey Skilling. They couldn't be seen doing any wrong. In fact the Fortune magazine rated Enron as the most innovative company in the United States for six years in a row. We now know what Enron was innovative at -- accounting fraud.

Indeed, many cases of financial fraud involve individuals with charming and convincing personalities who have an 'infectious optimism' that makes people trust them. Madoff, for example, was a family man who did a lot of philanthropy as well. He even donated money to lot of Jewish charities whose money he helped manage. He was also the non-executive chairman of the Nasdaq stock exchange for a few years in the early nineties. All this added to his credibility and ensured that the money kept coming into his investment scheme.

The halo effect was clearly at work in case of Satyam as well. Investors could see Raju doing no wrong, till sometime back. Raju even sold his shares in Satyam to fund social causes. How could such a man be a fraudster?

Turns out, there are black swans in this world, too, as Taleb would have us believe.

courtesy : Zeenews.com

[nithyasubramanian]

The aftermath of Satyam debacle

The unravelling of Satyam, one of the IT big four, has been so dramatic and so dense with meaning that it is hard to make sense of all of it at one go. There is the immediate, here and now of the issue; what would the government do, what should the investors do, and so on. Then, there are the long term, big picture, implications.

Before we talk about any of these things let's look at the story so far.

Satyam, founded in 1987, made a bid to acquire Maytas (Satyam spelled backwards) Properties in December last year. The value of Maytas Properties was a whopping USD 1.6 billion. The price of the company was immediately seen as being hugely inflated and a bid by Ramalinga Raju to benefit his sons, who control Maytas.

The quick and the brutal lashback from investors in the company saw the share prices plunge 30%, and the Satyam Board quickly reversed its decision. But the issue refused to die down. How did Satyam get to the point of offering this huge lolly to his sons? What was the Board doing while the Chairman was taking this decision? Even as speculation of all sorts did the rounds, Satyam saw an exodus from its Board. Three of its Board members resigned within a few days.

In January this year, Ramalinga Raju resigned from the Chairmanship and in a letter wrote of his financial misdeeds, which made trade pundits fall out of their chair.

Ramalinga Raju, in his resignation letter, said that the company has been following the (mal)practice of inflating its income for several years. Now that events had caught up with him, Raju in a moment of remorse divulged what he had been doing was wrong. And with a guilt-heavy conscience declared that he was ready to face the law of the land.

The fraud, totalling nearly Rs 7000 cr, is huge. If we go by what Raju said in his confessional letter, it started as a marginal difference in the actual profits and the profits shown by the company's books, which the management kept within wraps. The gap later became bigger, but the management still chose not disclose it. Then came the meltdown, profits slumped, and in a bid to bail out, Raju's decided to pitch for Maytas at an inflated price.

The move was meant to show that the (non-existent) extra money went into buying Maytas. The actual payment was supposed to be a fraction of the shown cost; the payment too was to be deferred.

This theory assumes that Raju is not lying in his letter, and that he really did not mean to profit from the fraud - an assumption we cannot easily make.

In another reading of the case, one could say that Raju inflated his company's profits so that he could offload his shares at a high price. The fact that he held just over 5% in the company before the whole thing blew up in his face not only came as a shock to the company, it seems also to actually point to this conclusion. But the reality can only be determined by an investigation, specifically at the time when Raju offloaded his shares.

This particular fraud is, by its nature, different from the ones that have surfaced before. Harshad Mehta's was not a company scam, neither was Ketan Parekh nor the Telgi fraud.

This is more of the type of fraud perpetuated by Enron. In fact, so it is being seen: India's Enron. The firm was being audited by PricewaterhouseCoopers, an internationally renowned auditing firm. It must have had its accounts checked by competent Chartered Accountants. How did then a fraud of such huge proportions remain buried over the years? The investigations so far seems to point to the fact that PwC auditors had been, very subtly, brought off. The investigators think that the oversight is quite inexplicable. They have raided the offices of PwC and seized documents relating to Satyam. In a bizarre twist, PwC has itself disowned its accounts saying that they cannot be relied. It says that the auditing was based on the statements made by the management, which they trusted. That is precisely the point: they were there to verify those very accounts.

Indeed, not just immediate action (which has been taken in the delisting of the company from the BSE and NSE) but a thorough investigation needs to be mounted.

There is that parable like quality to the story: a poor farmer's son works hard, establishes a company which rises like a meteor in the corporate sky to become one of the best and the biggest in its field. A staple tale of inspiration, which says hard work and talent can achieve it all. Flip the tale in the light of recent developments and it says miracles do not happen overnight, fast got is usually ill got, and it is better to go slow and steady than to flash ahead. It also says that spin doctoring, fiddling with the accounts can get you far on the road to success, but it will never see you through the last post.

Those roughly are the main philosophical thoughts that come to mind. Come a little down and there are implications for the global business as well. The Satyam episode like the Enron affair before it, is a stark reminder as to what could happen if we build a financial system that rewards quick profits and meteoric rises. The stock market reacts to disclosures of profits made by the company - more the profits, greater the rise in share prices. There really is no buffer through which this connection between disclosures (real or fictitious) and actual rise in share prices gets mediated.

In fact sheer lies, told with enough audacity, can create real wealth in the current financial system. When the sky really falls, it falls on the heads of common investors. The global financial crisis was the result of the same mix of dodgy business practices and the propensity to make a quick buck at whatever cost.

Though the global implications in themselves are such as to merit a thesis, the issue has very grave ramifications for the Indian economy as well. One should not see the fall of Satyam as the fall of a single company. The chill caused in the Indian Inc is due to much more.

The Indian growth story began with the boom in the ITeS (IT Enabled Services) sector. The BPOs came, testing and coding followed, KPOs, RPOs and LPOs came. The money that started pouring in - a trickle by global standards, a deluge by Indian ones - sowed a million dreams. Suddenly every sector started booming. Newly rich people needed goods, so retailed boomed; they needed houses so realty boomed; they needed bikes and cars so auto boomed. Financial services, telecom, luxury goods, you name it – all sectors grew with leaps and bounds. India started dreaming of leaving its dark days behind.

The Satyam issue suddenly has brought us face to face with our worst nightmare – that one day it will all disappear like a fond dream at the touch of the morning chill. Even though virtually all sectors of the Indian economy have grown, IT remains one of the key growth engines. It is not a stand alone industry; it supports many, many others.

A cold here would make the economy catch a fever. In the worst case scenario, global investors, already pulling out money from markets around the world, would hurry up to do so out of India. They would be so spooked that investment in India itself will dry up. The havoc that such an eventuality can play on the economy is incalculable.

But such a reversal looks quite improbable. What can actually happen is that global investors would be spooked to some extent, but would not turn away completely. Financial regulatory bodies would come up with a swathe of measures to close the loopholes and that will be that. After all we live in a post Enron world.

There is one more aspect that comes to my mind. Post Satyam's debacle, Infosys has gone to the extreme step of treating Satyam and its employees as untouchables. It has not only categorically refused to participate in a buyout, but has ordered that people from the company should not be hired.

This is a sheer over-reaction. Firms are not individuals. A change in management should turn it once again into a good company.

But equally its failure would not only put 65,000 workers out of job, but also affect six crore people in other industries. This is a behemoth of a problem.

While a government bailout is not called for - companies should pay for their malfeasance - a private buyout should be actively pursued.

courtesy : Zeenews.com

[nithyasubramanian]

Infosys top brass not to join Satyam board

New Delhi: Even as the Government is scouting for new board members and a CEO for Satyam Computer, the country's second largest software exporter Infosys Technologies steered clear that its top brass will not join the crisis-ridden firm due to conflict of interest.

Asked if any senior manager will join the board of

Satyam, Infosys Co-Chairman Nandan Nilekani said: "... that will not work. There is a clear conflict of interest. We are responsible for Infosys, many of us are shareholders of Infosys."

It would not be fair on either of the companies, if anyone from joins the new Satyam team, he added.

However, he added that the new members on the Satyam board are very impressive.

The name of Narayan Murthy, chief mentor of Indian IT bellwether Infosys, was doing the rounds as a member on the new Satyam board.

The Ministry of Corporate Affairs had constituted a new three-member Satyam Board, comprising HDFC Bank Chairman Deepak Parekh, former NASSCOM President Kiran Karnik, and former SEBI member C Achuthan, after the admission of financial fraud by Satyam's founder.

courtesy : The Financial Express.

[nithyasubramanian]

Credit Suisse suspends coverage of Satyam

Bangalore: Brokerage Credit Suisse said on Wednesday it was suspending its coverage of Satyam Computer Services after the Indian outsourcer said its profits had been inflated over the last several years.

"This clearly indicates that the current financials of Satyam cannot be relied upon," it said in a research note after Satyam's chairman and founder announced his resignation from India's No. 4 software services exporter.

"As such, we are unable to issue any further investment advice on Satyam and suspend our coverage of the stock," said Credit Suisse, which had an underperform rating on the share earlier.

courtesy :The Financial Express.

[nithyasubramanian]

'Satyam has not sought any govt financial help'

New Delhi: Satyam Computer Services has not sought any financial help from the government and the new board is working on reviving the company, Corporate Affairs Minister Prem Chand Gupta said on Thursday.

"The company has not asked for any package. Three days ago a new board has been appointed. The board consists of eminent persons. They are on the job," Gupta told reporters.

"Now it is for the new board to take a view. They may not need that," Gupta said while elaborating on any government financial help for Satyam.

"If they require funds, they will raise it from banks."

courtesy : The Financial Express.

[nithyasubramanian]

Satyam to restate accounts in 8-12 weeks

New Delhi: Firms appointed to restate Satyam Computer Services Ltd's accounts will do so in 8-12 weeks and the company will not need any financial help if its receivables come on time, a new board member said on Thursday.

"We are trying our best to salvage ... and large number of receivables are there. If it comes on time, then we can generate assets by hypothecating some assets," Deepak Parekh, appointed to the board by the government, told reporters.

He was speaking to reporters after meeting Montek Singh Ahluwalia, deputy chairman of the Planning Commission and a close aide of Prime Minister Manmohan Singh.

courtesy : The Financial Express.

[nithyasubramanian]

Satyam probe turns to role of banks in fraud

New Delhi: The probe into the Satyam scam has turned the spotlight on banks as investigators and its newly appointed auditors verify the company's numerous accounts. The government is trying to ascertain how much cash actually exists in Satyam's accounts, whether the bank certificates presented to auditors were forged, and whether bank employees colluded with company officials.

Satyam has claimed deposits of nearly Rs 180 crore for the year ended March 2008 in international branches of several global banks. These include Banco do Brasil, BNP Paribas, Citibank, Citibank International, China Merchants Bank, Dresdner Bank, HSBC Bank, Kookmin Bank, KSB Bank, Mitsui Sumitomo Bank, UBS, UniCredit Banca, United Bank, Wachovia Bank and Woori Bank.

The company has stated that another Rs 3,308.41 crore had been parked in long-term fixed deposits. Although the break-up of these investments is not available, Satyam has listed Bank of Baroda, BNP Paribas, Citibank, HDFC Bank, HSBC and ICICI Bank as it principal bankers.

When it comes to its current account details with foreign banks, Satyam's annual report not only lists the opening balance for the financial year against each account held, but also the maximum balance during the year. Interestingly, the company showed a balance of Rs 1,166.89 crore in various current accounts that earn zero interest, which caught the attention of government investigators and regulators. B Ramalinga Raju, former chairman of Satyam, had said that the company had Rs 5,040 crore in non-existent cash and bank balances on its books.

Meanwhile, Satyam's new board on Wednesday appointed KPMG and Deloitte as its new auditors to assist in the restatement of accounts, while previous bookkeeper Price Waterhouse said its audit of company has now been rendered "unreliable" after Raju's admission of fraud. According to Deepanker Sanwalka, a partner and national head of forensic services at KPMG, companies often include cheques in hand and remittances in transit to inflate cash balances. Another way is to forge bank statements to show fictitious reconciliation statements, he said.

The transactions pf Satyam's hundreds of accounts with some 50 banks and would be probed to determine whether any bank officials colluding with the company. "If employees of any bank connived with officials of Satyam, it is the responsibility of the bank to take action. It is highly unlikely that the banks themselves colluded with Satyam in this fraud. But if so, action can be taken under the Banking Regulation Act, 1949," a source...

courtesy : The Financial Express.

[nithyasubramanian]

We are happy with Satyam's service: SBI

Kolkata, Jan 15 (IANS) India's largest bank, the State Bank of India (SBI), has decided to retain its contract with scam-tainted information technology (IT) firm Satyam Computer Services for maintaining its Internet banking services, a top bank official said here Thursday.

'We are not at all thinking of changing Satyam as our vendor for Internet banking services. But we are prepared,' SBI deputy managing director in charge of IT, R.P. Sinha told reporters on the sidelines of an IT seminar.

'We are happy with Satyam's service as a vendor, there is no problem at all. If anything happens anywhere, we are fully prepared. There will not be any disruption in our net banking services,' Sinha said when asked whether the vendor is capable of handling the banking transactions that takes place through the portal.

Satyam's founder and disgraced former chairman B. Ramalinga Raju last week admitted to committing a Rs.70-billion (Rs.7,000-crore/$1.43 billion) accounting fraud.

Sinha said he was hopeful that the Satyam's condition would improve as the government was taking measures to 'bring it back to health'.

courtesy : AOL News.

[nithyasubramanian]

Confiscate Satyam-Maytas land, pay salaries to workers: CPI(M)

New Delhi, Jan 16: Asking the government not to use taxpayers money to bail out scam-struck Satyam, the CPI(M) on Friday demanded confiscation of about 17,500 acres of land, given to it and two Maytas companies by the Andhra Pradesh government, to pay for the salaries of its 53,000 employees.

It also wanted investigation into the "largesse" shown by the Congress government in the state in allotting public land to the companies belonging to the family of its chief B Ramalinga Raju and also whether the profits of Satyam were used to acquire assets by eight other firms owned by them, including Maytas Properties and Maytas Infra.

"It is high time that the Prime Minister and his cronies in the Planning Commission live up to their so far hollow rhetoric of not wishing to legitimise, leave alone permit, crony capitalism. This entire episode, once again, reconfirms the saying: Deceit, thy name is capitalism," Politburo member Sitaram Yechury said in an editorial in the forthcoming issue of party organ 'People's Democracy'.

Observing that there was widespread concern about the welfare and future of Satyam employees, he said the government was considering a bailout package for the staffers but noted that this could not be done "at public expense by using the tax payers' money".

Noting that three companies owned by the Raju family had "humongous real estate assets", Yechury said "these must be confiscated and converted into cash assets from which the employees' welfare must be safeguarded."

Maintaining that the Prime Minister had asked the Serious Fraud Investigation Office to probe the scandal within three months, he said while this needs to be done, the investigation "must cover all aspects of the swindle and not confine itself only to the cooked up accounts."

The CPI(M) leader said it was "simply unbelievable" that the "colossal financial swindle with cooked up account books" had surprisingly remained undetected for so many years and added that Raju's recent confession "appears to mask a larger loot and swindle".

While the ratio of operating margins to revenue was actually below three percent, they were shown as 24 percent in the accounts -- leading to a swindle of Rs 7,000 crore, he said.

Yechury said Satyam, Maytas Properties and Maytas Infra had been given a total of over 17,408 acres of land by the Andhra Pradesh government at ten places in the state.

He said the exaggeration of the health of the company and its profit margins contributed over the years in keeping the share prices of Satyam high on the stock market. "Thus, by orchestrating a false high price, the sale of shares would have raked in undue super profits. By selling shares when the prices are high, the profits could be used to acquire real assets elsewhere."

Yechury said the role of the company auditor Price Waterhouse Coopers should be probed and demanded that the investigation cover all angles of how public money was "siphoned off" by the family to acquire huge real assets.

"In addition, the largesse shown by the Congress state government of Andhra Pradesh in allotting public lands to the companies belonging to the Raju family must also be probed."

Yechury referred to the earlier scams including those involving sharebroker Harshad Mehta and said there was seldom any information on what happened to the ill-gotten wealth acquired through such scams.

"In this case, the government must not use the tax payers' money for a bailout. If the nationalised banks are asked to forward liquidity in lieu of a bailout, then this must be accompanied by these banks acquiring a corresponding stake in the company. In any case, confiscation of the assets of the company and using them to safeguard the welfare of the employees and paying compensation to the victims of this colossal loot is the best course available," he said.

courtesy : Zeenews.com

[nithyasubramanian]

Priority to protect Satyam employees: Das

A day before the second meeting of the new Satyam Computer Services board, newly-appointed director Tarun Das said the priority of the six-member team would be to protect the interest of employees, customers and investors.
"Our collective endeavour is to help find solutions to extremely difficult challenges facing the company and the priority is, as other board members have said, to safeguard the interest of employees, customers and investors," CII Chief Mentor said after being appointed on the troubled IT firm's board.
Das said he has accepted "the request" to serve on the government-nominated board of Satyam "in a spirit of public service".
The board, which held its first meeting on January 11, would be meeting tomorrow for the second time after the government appointed it to salvage the company from the impact of about Rs 7,800-crore fraud.
Besides Das, HDFC chairman Deepak Parekh, Nasscom past president Kiran Karnik and past presiding officer of the Securities Appellate Tribunal C Achuthan are the new members of the expanded board.

courtesy : NDTV.com

[sajiv]

Satyam denies executives leaving country

New Delhi, The scam-hit Satyam Computer Services Ltd today denied the media reports stating that some of the Company's executives left the country to avoid interacting with investigating authorities, saying "these officers are meeting with customers" in their regions to personally assure them of the IT firm's commitment.

"Satyam flatly denies malicious media reports that suggested that executives, specifically, Ram Mynampati, Virender Aggarwal and Keshab Panda, left the country to avoid interacting with investigating authorities," the company said in a statement.

In fact, Mr Panda remains in India, while Mynampati and Aggarwal have returned to the US and Singapore, respectively, where they are based, it added.

Satyam generates 97 per cent of it revenues from outside of India.

"These executives are currently meeting with customers in their regions to personally assure them of Satyam`s ongoing commitment," it said.

Due to these efforts, the company said, it has received many expressions of confidence and support from clients.

It said the executives remain in constant contact with Satyam`s board of directors and are available to the authorities.

The Company is cooperating fully with all ongoing investigations.

[nithyasubramanian]

Vishal's murder shocks family

He was shot dead outside his residence in Arkansas State

'Vishal was conservative, but always looked forward to learning new things'

His family members found an alliance for him and were about to fix his marriage, says a relative

HYDERABAD: Unlike youngsters of his age, Akshay Vishal was quite composed and cool in nature. It is difficult even to imagine Vishal Akshay entering into an argument with someone, relatives and family members say.

"Shooting down such a well-mannered youngster in an apparent robbery attempt, that too in an alien land (America) disturbed all of us," Chenna Keshavulu, colleague of Vishal's father N. Lakshmana Murthy, recalls with tears welling in his eyes. An employee of Satyam Computer Services Limited, Vishal from Hyderabad was shot dead outside his residence at Little Rock city of Arkansas State in America on Wednesday.

Mr. Keshavulu knows Vishal since the latter was two years old and feels that every father would love to have a son like Vishal. According to him the youth was a conservative to the core in his lifestyle, but always looked forward to learning new things in education and career. That way he was modern, Mr. Keshavulu remarks.

Pall of gloom
While Sankranti celebrations were on in all the flats of his apartment building at Gagan Vihar colony of Begumpet, a pall of gloom descended on Mr. Murthy's residence on learning about his killing. Vishal was youngest of the three siblings. His elder sister, N. Vijaya Srujana, is housewife, while the younger one, N. Sulakshana, teaches at Chinmaya Vidyalaya at Kundanbagh. After leaving for the U.S. in 2005, Vishal came to India a couple of times. As he was settled and climbing the career ladder, his parents even planned to perform his marriage. "Family members found an alliance for him and were about to fix his marriage when the ghastly incident occurred shattering the dreams of everyone," a relative says.

A large number of Mr. Murthy's colleagues called on him all through the day and consoled his family members.

Actress Kavita and Secunderabad MLA, Talasani Srinivas Yadav from Telugu Desam Party, former Union Ministers of State Bandaru Dattatreya and Ch. Vidyasagar Rao from Bharatiya Janata Party and Congress Lok Sabha member Anjan Kumar Yadav met Vishal's family members and assured them of all help to fly in Vishal's body to Hyderabad at the earliest.

courtesy : The Hindu.

[sajiv]

SEBI plea to quiz Ramalinga Raju deferred

HYDERABAD: The plea by India's market regulator Securities and Exchanges Board of India (SEBI) to question Ramalinga Raju, the disgraced former chairman of Satyam Computer Services, was deferred to Monday by a court here Friday.

The police plea to extend the stay of Ramalinga Raju, his brother and Satyam's former managing director Rama Raju and former chief financial officer Srinivas Vadlamani will be taken up in court later Friday.

SEBI officials want to follow up on Ramalinga Raju's startling confession on Jan 7 that he had overstated the company's financial position by Rs.70 billion ($1.43 billion)