Shockwaves have roiled Satyam for the last few weeks, but the big one just hit.
Chairman Ramalinga Raju resigned after saying the company falsified earnings and assets. The filing with the Bombay Stock Exchange is here.
"The gap in the Balance Sheet has arisen purely on account of inflated profits over a period of last several years ...What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years....Every attempt made to eliminate the gap failed. As the promoters held a small percentage of equity, the concern was that poor performance would result in a take-over, thereby exposing the gap....The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. Maytas’ investors were convinced that this is a good divestment opportunity and a strategic fit. Once Satyam’s problem was solved, it was hoped that Maytas’ payments can be delayed. But that was not to be. What followed in the last several days is common knowledge."
Appears riding the tiger turned out to be a fatal adventure...