The Raju brothers conspired such a huge scam to increase their revenue fictitiously. An increase in revenue projected a tremendous increase in profits. This attracted a lot of investors which in turn made the share price reach new heights. The Satyam brothers, who were the founders and promoters of Satyam companies used this opportunity and sold their holdings at a much higher price. They took a profit of crores through the sale. The brothers did this by adjusting and modifying the books and bank statements to act in their favor.
Most companies make use of ERP system for accounting. But the Raju brothers used their strength and developed their ERP system for accounting purposes. This system, unlike its counterparts, had numerous loopholes.
The projected fake bank statements held more money than the actual one. They simply converted this money into a fixed deposit account. The value of such fixed deposits was roughly around crores. The PWC who were the auditors of the Satyam companies failed in their job terribly. They did not verify the invoices or bank statements. That is when the brothers decided to invest it in Matyas.
However, the board did not like the decision. This gave rise to a lot of problems which made the share prices fall drastically. The company was subjected to answer numerous questions. The pressure started building up. Unable to find a new escape plan the brothers decided to confess the truth. The CBI took charge of the case and started the investigation. The Raju brothers and the auditors were sentenced to prison and were charged a huge sum as a penalty. Ramalinga Raju was convicted with 10 other members on 9 April Takeover by Tech Mahindra After the fraud came to the light, the government had ordered an auction for sale of the company in the interest of investors and over 50, employees of Satyam Computers.
It was acquired by Tech Mahindra , and was then renamed as Mahindra Satyam, and was eventually merged into the parent company. Citibank froze all its 30 accounts in The probe itself continued for almost six years and found that fictitious invoices were created to show fake debtors on the Satyam books to the tune of up to Rs crore. Like us on Facebook and follow us on Twitter. Financial Express is now on Telegram.
Click here to join our channel and stay updated with the latest Biz news and updates. The Satyam Computer Services scandal was a corporate scandal affecting India-based company Satyam Computer Services in , in which chairman Ramalinga Raju confessed that the company's accounts had been falsified.
After the fraud came to the light, the government had ordered an auction for sale of the company in the interest of investors. Since then he has been successful in getting his bail extended on various grounds. As of 31 January , Sahara still had to pay Rs 10, crore to meet its total liability. Belonging to the coveted Ambani clan is no mean feat. However, living up to the reputation can end up taking a toll on you. Anil Ambani has been fending off creditors and fighting multiple cases in courts amid his phone carrier Reliance Communications Ltd.
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