ALL ABOUT THE SCAM
A Hyderabad court sentenced former Satyam chief Ramalinga Raju to seven years imprisonment after he was found guilty of fraud, in the country’s biggest-ever corporate scandal
What is the fraud about?
It is about corporate governance and fraudulent auditing practices. The company misrepresented its accounts to its board, stock exchanges, regulators, investors and stakeholders
Is this an accounting fraud, a market manipulation/ fr fraud or both?
It is a fraud, which misled the market and other stakeholders by lying about the company’s financial health
Who is to blame here?
The promoters are primary culprits, although it is almost impossible to misrepresent such facts without the connivance of the auditors and some executive board members
In 2009, Raju admitted to overstating profits and inflating the company’s balance sheet In a CONFESSIONAL LETTER to shareholders in 2009, Raju said: “The concern was that poor performance would result in a takeover… It was like riding a tiger, not knowing how to get off without being eaten.”