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Satyam Computer Scandal

Satyam Computers is the fourth largest IT company of India after Tcs, Infosys, and Hcl. However, recently Ramalinga Raju, chairman of Satyam Computers, confessed that he has been showing false profits, and has tampered with the balance sheets of the company. This news disappoints a large group of people and especially clients and employees of Satyam, whose future depend on the company. After this news broke, Satyam shares went under a heavy fall in which the shares dropped from RS 172 per share to Rs12 at the end of that day.

The entire stock exchange is disappointed by this incident and the stock exchange in India closed at less than the 9 thousand mark. This forgery in the balance sheets of the company by Ramalinga Raju will definitely adversely affect its 53 thousand employees around the world. The government needs to take some positive steps if they want to avoid some huge job losses in the market.

Satyam Computer Services Limited is a leading global consulting company and spans 55 countries. It is also one of the most well known companies in the entire world in the IT sector. It was established by Mr. B. Ramalinga Raju and B. Rama Raju on June 24, 1987. In 1991, it was recognized as a public limited company and got its first Fortune 500 client, Deere and Co. The 90s were a time of growth for the company. Satyam Computers has domain expertise in areas such as automotive, banking & financial service, insurance & healthcare, manufacturing, telecom, infrastructure, media, entertainment, and semiconductors. In starting, Satyam opened more companies in its group like Satyam Infoway, Satyam Spark Solutions and Satyam Enterprise Solutions. Infoway became the first Indian internet company to be listed on NASDAQ.

Satyam Computers is an IT company and has acquired a name for consulting for major corporations with an emphasis on implementing technology and programming solutions for its customers. But now the investors in the company are worried about their money that they have invested in the company. The larger concern for the investor community is that this incident might impact Satyam’s core IT business. Industry sources said six to eight clients with long-term engagements with the company are seriously re-evaluating their IT outsourcing contracts “since they are not satisfied with the intent and focus of the company”.

The individual investors of the company are facing financial difficulty because their shares in Satyam have lost their value from when they bought them. Also, these individual investors cannot complain to anybody because this was their own decision and therefore are at least partially accountable for their trouble. This is not a story of one investor but of many investors who have been hit by fraud of Satyam’s Chairman. The government needs to take some serious steps so that these investors do not get cheated in the future.