Another day, another deca-billion dollar fraud:
“Dear Board Members,
“It is with deep regret, and tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice…”
WSJ: Satyam Computer Services Ltd. Chairman B. Ramalinga Raju Wednesday resigned admitting to falsifying company accounts and inflating revenue and profit figures over several years, sending the company’s shares plunging 78%.
In a letter to the company’s board, which was released to the Bombay Stock Exchange, Raju said that Satyam had inflated its operating profit for the three months ended Sept. 30 to 6.49 billion rupees ($136 million) from 610 million rupees reported previously, while revenue was inflated to 27 billion rupees from 21.12 billion rupees. It had reported an operating margin of 24% which was actually 3%.
Raju also said Satyam’s balance sheet as of Sept. 30 had a non-existent cash balance of 50.4 billion rupees; nonexistent accrued interest of 3.76 billion rupees; an understated liability of 12.3 billion rupees; and an overstated debtor position of 4.9 billion rupees compared with 26.51 billion rupees reflected in its books.
“This has resulted in artificial cash and bank balances going up by 5.88 billion rupees in the second quarter alone,” said the executive. Keep reading >
Well, at least he’s straightforward about it.
Anyone else? It’s confession season. Might as well get it out of the way.
Chairman Raju: Um, there’s something I’ve been meaning to tell you…
Satyam lets its shareholders in on the news: