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should satyam computer be prosecuted for fraud?

Lawyer

Forum Moderator

Chairman B. Ramalinga Raju’s admission that Satyam Computer Services Ltd’s Balance Sheet was completely fabricated got the stock crashing down by 66.5 per cent to Rs 60 from Wednesday’s high of Rs 188.70.



Raju’s letter to the company board revealed a fraud of unprecedented proportions. He states that Satyam’s balance sheet as on Sep 30, 2008, carries an inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 reflected in the books). Further, it carries an accrued interest of Rs 376 crore which is non-existent. The books carry an understated liability of Rs 1,230 crore on account of funds arranged by Raju, and an over stated debtors position of Rs 490 crore (as against Rs 2,651 crore in the books).



The resignation letter of Ramalinga Raju is attached herewith.



The Satyam story poses a big question over the credibility of auditors in general, as PricewaterhouseCoopers was auditor of the company. The bankers to Satyam included Bank of Baroda, BNP Paribas, ICICI, HDFC, Citi Bank, HSBC.


Should Satyam and their auditors PWC should be prosecuted for fraud on the investors.


Your comments on the issue on how to curb issues like this legally.

 
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Lawyer

Forum Moderator

 The resignation letter of Ramalinga Raju is attached herewith.




Attached File : 8 satyam computer services ltd 070109.pdf downloaded 190 times
 
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yes sir they should be prosecuted under indian legal systemand a thorough investigation has to be done to know where the funds came from .

 
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business

This is very serious matter. Serious Fraud Office of MCA will look into the same alongwith SEBI and St. Exchanges .


Role of auditors PWC will have to be examined. Such a big fraud cannot happen without auditors being involved. There might be some political nexus also as Mr. Raju had acquired various properties in other companies.


What ever happens  the truth is that investor confidence has shaken. Role of Chartered Accountants/Auditors is under Scanner.


The image of Indian co.'s listed abroad will be seriously damanged . Satyam may face action not only from Indian Regulator SEBI but also from abroad .

 
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Advocate

yes 100% agree with mr anup

 
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advocate

no question.... definitely they should be prosecuted , they have to answer for the public.... as a limited company they should, otherwise it will be a great impact and worsen the entire corporate world. It's really a shame to Auditors like PWC.  

 
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LAWYER AT BUDHIRAJA & ASSOCIATES SUPREME COURT OF INDIA

Thanx Mr. Y. Prakash

 
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Lawyer

I agree

 
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Once  a senior officer cofessed of a fraud, the least the govt would have done was to arrest thedirectors/ auditor andthe CFO  , sealed the offices and records of the auditors and the company and its directors. Then only a message would have gone home that government means business.


The  Ministers PCGupta makes a fool of himself when he talks of prosecution after enquiry. In this case enquiry  shoud have been custodial. It is high time the the mighty are shown the majesty of law.

 
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ADVOCATE

Dear All,


"Fraud" is not a new phenomena in Industry.But  Satyam case  really caused huge shock over the nation and the investors and employees of the company also affected badly.


Now the Goverment should act properly and transparently to clear the isssue and reduce the damages cuased to the nation.


JAGADEESH

 
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