In a spectacular case of fraud that sent shockwaves through India Inc and global corporations, Ramalinga Raju, founder and chairman of India’s fourth largest IT company, Satyam, disclosed that the company had falsified its balance sheets and inflated its profits by Rs50.4 billion (US$1.02 billion).
In a letter to Satyam’s board of directors on 7 January, Raju announced his resignation as chairman and chief executive, after confessing he had manipulated the company’s accounts for several years. The letter provided details of false reporting of inflated profits over the last several years. “What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It has attained unmanageable proportions”.
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