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Old 7th January 2009, 15:34   #46
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Its interesting to read Raju's letter. Apparently the operating margin is just 3% instead of the declared 24% ! Who will ever consider buying this co in this case?

I doubt how the employees will continue to get their salaries with the company having "nil" bank balance. Raju was so far selling his stake to keep it running and now that will stop since he is out. The new management will have a tough task ahead to get the company "gracefully" exit the IT scene.

The plan was to "buy" Maytas for Rs 5000 crore (actually for free) and show it in the book as an asset. But that got screwed up and skeletons started falling out....

Last edited by appuchan : 7th January 2009 at 15:38.
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Old 7th January 2009, 15:38   #47
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Quote:
Originally Posted by anurag_p80 View Post
Till now, we have not heard from customers, wait till the US wakes up.
US would start waking up in a couple of hours....But i guess Europe is still awake!

There was an internal mail circulated amongst Satyam Employees (I happen to be one as well) from Ram Mynampati which is now being torn apart by CNBC!

They are asking the obvious question....Is it really true that he did not know all this was happening?

I dont think its possible. I feel Raju is just being used as a scapegoat. Everyone would have been hand in glove with this inflated books build up over the years.
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Old 7th January 2009, 15:39   #48
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I understand that these are testing times for anyone and everyone directly and indirectly involved with Satyam. Hold in there, guys!


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Originally Posted by anurag_p80 View Post
Well dude, you are right on that front ... Let's not even go there.
Anurag, please be aware of what you mention on a public forum. You never know when some seemingly innocent remark comes back to haunt you later. Nothing else but just a friendly advice.
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Old 7th January 2009, 15:42   #49
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Quote:
Originally Posted by Rajesh Rawal View Post
Ok ...so i was reading through all the comments posted by all you fine people..

i am employed with satyam ,yes indeed this is a challenging time for us.

just finished reading the chairman's resignation letter (quite emotional)..

but guys lets not forget the man built this place from scratch ,we are not the 4th largest i.t company by sheer luck..

i read some strong comments ,like he should be hanged and all (i found that amusing)

anyways will follow this thread and see the gyan guru's post their fine thoughts...

and yes its not paid holiday for us ,its the real testing times.

Cheers...
That's amazing solidarity shown by you Rajesh. I reckon all Satyam TBHPian's should take a cue from this and stick to company during this trying times.

Who knows you may find a ray of hope at end of this dark tunnel. But, also be prepared for further darkness too

What happened is very unfortunate and at highest level, employees would never be aware about such happenings whatever be the company. So, pray that a reputed company like IBM or HP gobbles up Satyam and restores confidence for everyone related to the company and saving as many employee's career as much as they can.

Until, then let's wait and watch as to what's in store for all Satyam employees.
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Old 7th January 2009, 15:48   #50
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Used to be said in the 70's that Indian companies have three sets of accounts, one for the owner, one for senior management, and one for the shareholders/public. Obviously the old habits are still kicking, and that the saying was more than just a joke. How many more Satyams (incidentally Maytas is Satyam spelt backwards, in case you missed it) are there?
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Old 7th January 2009, 15:49   #51
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Quote:
Originally Posted by mobike008 View Post
That's amazing solidarity shown by you Rajesh. I reckon all Satyam TBHPian's should take a cue from this and stick to company during this trying times.

So, pray that a reputed company like IBM or HP gobbles up Satyam and restores confidence for everyone related to the company and saving as many employee's career as much as they can.

Until, then let's wait and watch as to what's in store for all Satyam employees.
Its good to see high spirits among Satyam employees at these tough times. Who knows which company is next. I am sure there are more such cases in the cupboard.

Regarding some company buying out Satyam, its highly unlikely that anybody would be interested to buy 53,000 "expensive" employees with 3% operating margin and zero bank balance. But then the customers of Satyam would be a hot target by many IT Cos and along with them some the best client-facing roles/employees may get absorbed elsewhere. Those who are in the support mode and offshore/delivery areas may have to find a way of their own.

All the best to Satyamites.
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Old 7th January 2009, 15:52   #52
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Quote:
Originally Posted by Rajesh Rawal
Ok ...so i was reading through all the comments posted by all you fine people..

i am employed with satyam ,yes indeed this is a challenging time for us.

just finished reading the chairman's resignation letter (quite emotional)..

but guys lets not forget the man built this place from scratch ,we are not the 4th largest i.t company by sheer luck..

i read some strong comments ,like he should be hanged and all (i found that amusing)

anyways will follow this thread and see the gyan guru's post their fine thoughts...

and yes its not paid holiday for us ,its the real testing times.

Cheers...
Can quite understand that these would be testing times for you Rajesh as well as all the other Satyam guys. Thought the letter was quite emotional myself.

Lets hope that this change brings with it many new opportunities. Good luck!
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Old 7th January 2009, 15:55   #53
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What exactly is this fraud?

I am not quite able to understand it.

Satyam showed more profits than what they were making. This means they would have had to pay more taxes to the govt as well. That is a good thing.

People kept buying shares because they thought this company was making more money than it actually was. That is a bad thing.

Can some one please explain this to me?
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Old 7th January 2009, 15:58   #54
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Quote:
Originally Posted by anurag_p80 View Post
By revenues, who knows??
Price Waterhouse will know it.
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Old 7th January 2009, 16:01   #55
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Friends, Keeping emotions aside, this is unacceptable.

What core values do organizations talk(like transparency etc) when the management do not lead the pack.

Nobody has any right to keep thousands of people at risk of jobs for thier own crimes!!

It is heartening to see Satyamites support the company in these times(my personal feeling is we are being too 'indianish' as we tend to excuse anything and everything under the guise of 'act of god'!!)

I wish these bad tidings are over sooner than later!!!
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Old 7th January 2009, 16:12   #56
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Good to know that people in satyam are confident of having a brighter side soon. However many people seem to have questions on what the problem exactly is. Please find below a letter from Raju himself to the board of directors. That should be able to throw some light on many perceptions. I would stand with Satyam employees as I believe that they are not a company in shambles but just caught in market with a lot of fear. They should be safe with a new management soon.

Got this from a dependable source.
Attached Files
File Type: pdf satyam-the-letter-raju-wrote.pdf (157.3 KB, 213 views)
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Old 7th January 2009, 16:18   #57
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Cooking books to stave off a takeover? I smell more of an insider trading rat out here. Mr. Raju wishes us to believe some millionaires made on the stock market would have been incidental? Indian markets specialise in benami wealth, and he proclaims that neither he nor his brother benefited one rupee !!!
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Old 7th January 2009, 16:22   #58
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This is unreal to say the least. Highly unimaginable that a company like Satyam was doing this and that too over some years now. Surprising and disheartening.

This is pure fraud. All the top folks must be involved.

Oh how things change, i remember we were sulking when we didnt get picked up on campus by Satyam. It was a dream company for many.

For all the Satyamites, keep the faith. Big Blue is looking at you.
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Old 7th January 2009, 16:22   #59
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Quote:
Originally Posted by mobike008 View Post
What happened is very unfortunate and at highest level, employees would never be aware about such happenings whatever be the company.
Sorry to disagree with you on this Mobike, but i am putting a quote from Raju's Letter to the Satyam Board below


1. The Balance Sheet carries as of September 30, 2008,
a) Inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 crore reflected in the books);
b) An accrued interest of Rs 376 crore, which is non-existent
c) An understated liability of Rs 1,230 crore on account of funds arranged by me;
d) An overstated debtors' position of Rs 490 crore (as against Rs 2,651 reflected in the books);

2. For the September quarter(Q2) we reported a revenue of Rs 2,700 crore and an operating margin of Rs 649 crore(24 per cent of revenue) as against the actual revenues of Rs 2,112 crore and an actual operating margin of Rs 61 crore (3 per cent of revenues). This has resulted in artificial cash and bank balances going up by Rs 588 crore in Q2 alone.

The gap in the balance sheet has arisen purely on account of inflated profits over several years (limited only to Satyam standalone, books of subsidiaries reflecting true performance).
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 as the size of the company operations grew significantly (annualised revenue run rate of Rs 11,276 crore in the September quarter, 2008, and official reserves of Rs 8,392 crore).

Source - Ramalinga Raju quits Satyam; admits to fraud - Express India

Are you saying that the Satyam Management/Board was not aware of this? Dude, the company is declaring false profits purely to stay ahead of competition. I know everyone does it. Its just unfortunate that it became unmanageable (like the letter claims). Its a case of pure forgery of accounts and nothing else.

Another excerpt from the letter -


The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. Maytas' investors were convinced that this is a good divestment opportunity and a strategic fit. One Satyam's problem was solved, it was hoped that Maytas' payments can be delayed. But that was not to be. What followed in the last several days is common knowledge.

No idea what he/board was thinking when they thought this up.

While i am not disagreeing with what Satyam has managed to build from 'scratch', this is not the best of it! Let's hope we all manage to come out unscathed from this.
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Old 7th January 2009, 16:27   #60
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The similarity to Enron is too much. Enron too was showing assets by owning shares in shell company they owned in the first place. Satyam tried to do the same and got caught before the act.

I was one of the investor in SIFY (Nasdaq) in late 90s. After I bought the shares, it soared 6 times and made us all giddy. Then it dived all the way down, I was lucky to sell it when it still had twice the rate.

Quote:
Originally Posted by khan_sultan View Post
The biggest irony is that Satyam had won the 'Golden Peacock' award for excellence in corporate governance in Sept 2008. And this was not an Indian award -- but a Global award for corporate governance.
Now that award body must be looking for places to hide. Who would want their golden peacock in 2009?

Quote:
Originally Posted by Steeroid View Post
Arent the Auditors who signed off these obviously fudged Balance Sheets going to be hauled up? People who pocket large sums of money and bug employees for months before signing off on such large coverups?
Yup, that's how one of the largest auditing company Arthur Anderson is no more, they extended the same co-operation to Enron.

Last edited by Samurai : 7th January 2009 at 17:52. Reason: typo
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