Ramalinga Raju, chief of Satyam Computer Services was very respected man in India and his home town Hyderabad. Even in wildest dream no one would have thought he would become Stein Bagger of Denmark or Madoff of USA.
Stein Begger’s story is somewhat similar to Raju. He too got entrepreneur of the year award, his company was progressing at fast pace, Accounts were audited by world’s top audit firms KPMG audited IT Factory's accounts from 2005 through 2007. Deloitte did the same in the previous two years. From 2003 through 2007, IT Factory reported that its revenue grew 69 times and its profit rose 288 times, to 121 million kroner ($22 million). This year, says Mr. Jensby, the chairman, IT Factory expected to roughly quadruple its profit.
Mr. Bagger used a web of phantom firms to get money from banks and then used these same companies to place big purchase orders for IT Factory software and services. He was buying from himself using other people's money.
But Stein was no match in front of Ramalinga Raju of Satyam. Raju was a good cook, he use to cook his account books very efficiently and god knows for how long he did this. Satyam is counted among India’s top 4 IT firm. Revenue for last year touched 2 Billion US $ and reportedly had Cash in hand of 1 billion US $ on September 2008.
The Harvard Business School alumnus, who pioneered offshoring in 1991 by servicing Illinois-headquartered Fortune 500 farm equipment company John Deere, today Raju admits he fudged the company’s books and faces criminal prosecution. Raju admitted in a letter to board members that he cooked accounts to show that company has nearly 5000 Crore Rs. (aprox. 1 Billion US $) in cash when there was none.
Till December 16, the day Satyam announced a botched bid to take over Maytas Properties and Maytas Infra, owned by his sons, for a staggering $1.6 billion, it seemed nothing could go wrong with Raju or his company. But his sudden fall was as dramatic as his rise.
Today, Satyam has over 53,000 employees on its payrolls, spread across 60 countries. I feel sorry for all the employees who worked hard for the company and now will be loose their jobs as there is no money left on accounts!!!
Stein Begger’s story is somewhat similar to Raju. He too got entrepreneur of the year award, his company was progressing at fast pace, Accounts were audited by world’s top audit firms KPMG audited IT Factory's accounts from 2005 through 2007. Deloitte did the same in the previous two years. From 2003 through 2007, IT Factory reported that its revenue grew 69 times and its profit rose 288 times, to 121 million kroner ($22 million). This year, says Mr. Jensby, the chairman, IT Factory expected to roughly quadruple its profit.
Mr. Bagger used a web of phantom firms to get money from banks and then used these same companies to place big purchase orders for IT Factory software and services. He was buying from himself using other people's money.
But Stein was no match in front of Ramalinga Raju of Satyam. Raju was a good cook, he use to cook his account books very efficiently and god knows for how long he did this. Satyam is counted among India’s top 4 IT firm. Revenue for last year touched 2 Billion US $ and reportedly had Cash in hand of 1 billion US $ on September 2008.
The Harvard Business School alumnus, who pioneered offshoring in 1991 by servicing Illinois-headquartered Fortune 500 farm equipment company John Deere, today Raju admits he fudged the company’s books and faces criminal prosecution. Raju admitted in a letter to board members that he cooked accounts to show that company has nearly 5000 Crore Rs. (aprox. 1 Billion US $) in cash when there was none.
Till December 16, the day Satyam announced a botched bid to take over Maytas Properties and Maytas Infra, owned by his sons, for a staggering $1.6 billion, it seemed nothing could go wrong with Raju or his company. But his sudden fall was as dramatic as his rise.
Today, Satyam has over 53,000 employees on its payrolls, spread across 60 countries. I feel sorry for all the employees who worked hard for the company and now will be loose their jobs as there is no money left on accounts!!!
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