Lies, Lies and More Lies
First, you have the whole Bernie Madoff scandal with his 50 billion dollar ponzi scheme. Now comes news that Satyam Chairman B. Ramalinga Raju has been cooking the books at Satyam Computer Services Limited (SAY). Ramalinga Raju resigned today after admitting to running a giant accounting fraud.
According to the Wall Street Journal, Satyam Computer Services Ltd. Chairman B. Ramalinga Raju Wednesday resigned after admitting to falsifying company accounts and inflating revenue and profit figures over several years, sending the company’s shares plunging 78%. Apparently he lied about the company’s earnings, profitability and cash position. He inflated Satyam’s financial position by claiming the firm had over 1 billion dollars in cash and millions in nonexistent assets.
Satyam Computer Services is an Indian information technology company that provides business outsourcing worldwide. Satyam shares have taken a nosedive from $9.35 to .82 after Raju’s announcement. The SEC board of India has halted trading of the stock as it investigates malfeasance. The irony is that Satyam means truth and telling the truth was by no means standard operating procedure at Satyam. The CEO did countless television interviews while lying about the financial strength of Satyam.
The Bernie Madoff’s, Ramalinga Raju’s and Jeffrey Skillings are becoming far too common place in today’s corporate enviroment. At a time when investors are already lacking confidence in the financial markets, crooks like these only help to further dissipate trust.
Photo by markhillary
I have a feeling we’re going to be hearing more and more about companies who try to cook the books.
Too much pressure to make money, I think.
@TStrump
Very true. There are probably more accounting scandals out there.