While there is no doubt that the Satyam scandal could rock the entire nation and perpetrate deep cracks into the economy is not taken care of. Satyam’s survival is ultimately crucial and damge control needs to be done.
The big question on survival of Satyam Computer is giving anxious moments not only to its over 50,000 employees but also to over half-a-million people, who would get impacted indirectly if the IT firm does not come out of the trouble, CII President K V Kamath said on Saturday.
The Satyam fraud may have come into the limelight after Ramalinga Raju’s disclosure of alarming facts regarding the cooking up of accounting books to an upward inflated amount of Rs. 7000 crores. The Satyam scam has become transparent in public domain now itself, but it would come to your surprise, that an analyst had figured it out way back in October 2008.
At the analyst conference call, Kawaljeet Saluja from Kotak Securities had enquired the rationale for the $550 million lying idle in a current account. A deposit in a current account doesn’t attract any interest.
The analyst interaction, organised after Satyam’s second quarter earnings of 2008-09, was addressed by chairman Ramalinga Raju, CFO Srinivas Vadlamani and Ram Mynampati, member of the board, who is now the acting CEO.
Citing no specific reason for parking the funds in the current account, Vadlamani said that the money was restricted to the second quarter only and thereafter the amount goes to the deposit account. Unconvinced by the answer, Saluja probed further.
Dwindling at an all time low of Rs. 23, the Satyam stock may seem like a good buy for some investors at such a pitiable price. Here is what India Infoline CMD Nirmal Jain feels about the same,
We won’t buy any stock as the company can go bankrupt. I am surprised that trading in Satyam is still continuing.
He feels money was siphoned off from Satyam. “The Satyam fraud is likely to be a case of collusion, not negligence. It is difficult to believe that Ramalinga Raju was the only one involved in scam.”
So Satyam is a strict no-no according to Mr. Nirmal Jain’s views. What do you feel about his views? Anyone begs to differ?
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