ALL ABOUT THE SCAM

Hindustan Times ST (Mumbai) - HT Navi Mumbai Live - - FRONT PAGE -

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

CON­FES­SION

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.”

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