Subscribe to the Real Truth for FREE news and analysis.Subscribe Now
Indian software company Satyam has been damaged by corruption, deception and scandal, as the chairman and founder, Ramalinga Raju, was arrested earlier this week on charges including forgery and conspiracy. Mr. Raju confessed to falsifying the firm’s profits and cash reserves for several years.
Government authorities also took into custody Satyam’s former chief financial officer, the entire board of operations, and Mr. Raju’s brother, also on staff.
The Indian government installed a new board for Satyam as it tried to contain the fallout from the scandal. Particularly in jeopardy is a workforce of 53,000.
Kiran Karnik, one of three men selected to the newly constituted Board of Satyam, said, “Our only concern is to keep the show going and hold on to the clients and the workers” (BBC).
“We are determined to reach the truth,” stated a government press release, “but are equally concerned with the fate of employees and other stakeholders.”
To restate its financial results, Satyam needs to find out how much cash it really has. In addition, new auditors have been chosen to study the full scope of the fraud.
The firm’s shares have fallen considerably this week. Previous to the scandal, shares were valued at approximately 180 rupees ($3.71 USD). Following news of the company’s deceptive activities, shares took an abrupt dive, ending roughly at 20.05 rupees (42 cents USD).
Reuters warned that this may impact many businesses decisions to send contracts overseas: “Financial services firms who are considering outsourcing in foreign countries will now have an additional reason to hesitate. The risk of scandal and fraud is the last nail in the coffin.”