Satyam Chairman Ramalinga Raju decided to “come clean” directly about his fraud, rather than wait for someone else (like his sons) to do it for him. But remember, he’s a fraudster, and as such can’t be trusted. Like Madoff, he’s lost any expectation of believability. A commenter pointed us to this blog post arguing that there are deeper problems at Satyam than mere fraud:
For the September quarter (Q2) we reported a revenue of Rs 2,700 crore and an operating margin of Rs 649 crore (24 per cent of revenues) as against the actual revenues of Rs 2,112 crore and an actual operating margin of Rs 61 crore (3 per cent of revenues). This has resulted in artificial cash and bank balances going up by Rs 588 crore in Q2 alone”
Satyam last quarter profit is only 61 crores ? That sounds too low. For a sales of 2112 crores , why are they earning only 61 crore profit. Is this an IT company or a street side fake CD seller ?
If last quarter profit is only 61 crore then how can the new CEO say ” Over the past 20-one years, with your passion and commitment we have built significant customer assets, formidable service offerings, excellent delivery processes and scalable support systems.”
The question is: How can the “honest” margins be so far below that of its competitors, unless the whole thing was a total disfunctional mess — which, of course, is a total possibility.