Meagan Flood
January 23, 2009
1:22 p.m.
The former chairman and founder of Satyam, B. Ramalinga Raju, has recently confessed to making up more than 10,000 employees and using fake names to purchase property. Also confessing to forging documents relating to fixed bank deposits. Satyam is one of the largest information services outsourcing company based out of Hyderabad, India. Raju wrote a letter to the company board admitting that close to “$1 billion dollars was “nonexistent” and that he had falsified its profits for years to avoid losing control of the company” The prosecutor from the Crime Investigation Department in India stated in court that Satyam only employed 40,000, which are significantly less than the 53,000 they claim. Raju is also accused of using this money to buy over 400 pieces of land using fictitious names including his mothers. Satyam, being a global company, holds listings on the New York Stock Exchange as well as Euronext. Also known to do business with at least one-third of the Fortune 500 companies such as General Motors, General Electric and Nestle. So far the only company to cut ties with Satyam is State Farm Insurance. In efforts to help alleviate this major debt the new appointed board members are considering asking over 600 customers to pay their bills early. Satyam is said to have about $350 million waiting in pending payments from these customers.
Reading this article made me realize just how easy it is for a company to scam people. It makes me wonder just how many of these leading companies might have done something similar to this but has not gotten caught yet. Motivated by greed this man forged $1 billion dollars just so he would not lose control of the company he created. Major companies like these need to have more than just one chief financial adviser. Some type of board needs to be appointed to make sure that no illegal activity is going on throughout the company.
http://www.iht.com/articles/2009/01/18/business/outsource.1-409915.php
http://www.iht.com/articles/2009/01/22/technology/outsource.4-413952.php
Katelin Walpole
ReplyDeleteJan 24, 2009
6:09
The worst thing about this guy scaming all these people is that he most likely won’t be penalized for it. If he does get convicted for his offenses, the punishment won’t fit the crime. White-collar financial crimes go unpunished all the time because people in power can buy their way out of trouble. For example, Bernie Madoff who just screwed thousands of people out of billions of dollars is only on house arrest until his trial. It took almost five years for Jeff Skilling, the CEO of Enron to receive his prison sentence, which will probably get appealed after a year or two anyways. Our government allows its citizens to be financially raped by big business on a daily basis. We pay taxes to operate prisons that are full of harmless kids who got caught experimenting with drugs, while the really dangerous guys who abuse their power to cheat thousands of people are walking the streets.