April 8, 2009
Indian authorities have formally charged Satyam founder and chairman Ramalinga Raju and several alleged accomplices with a range of crimes stemming from a massive accounting fraud that's been dubbed "India's Enron."
The charges, which run 300 pages in length, include criminal conspiracy, impersonation, forgery, falsification of records, and evidence tampering. Charged along with Raju were Satyam managing director Rama Raju, CFO Vadlamani Srinivas, finance VP G. Ramakrishna, senior finance manager D. Venkatapathy, assistant finance manager Ch. Srisailam, and director Suryanarayana Raju. Also charged were two employees of Satyam auditor PricewaterhouseCoopers India. In compiling the charges, India's Central Bureau of Investigation said it interviewed 433 witnesses and examined more than 1,500 documents containing a total of about 65,000 pages. "CBI has completed the investigation in a record time of 45 days," the agency said in a statement Tuesday. Satyam shares plummeted in early January, after chairman Raju admitted falsifying the company's cash position by as much as $1 billion while overstating quarterly earnings and revenue by up to 28%. Satyam may also have faked employee numbers and other data. Raju tendered his resignation and was arrested and jailed. Satyam has placed itself on the block in hopes of finding a buyer with pockets deep enough to see it through the current crisis. The company has said it hopes to complete the sale process by April 30. Interested bidders include iGate, Larsen & Toubro, and Spice Group. A report Tuesday in India's Business Standard newspaper said tech giant IBM had pulled out of the running for fear of lawsuits by Satyam investors defrauded by Raju and his accomplices. Satyam recently warned potential buyers that it has no way of estimating the impact of numerous class-action suits filed against the company in the wake of the accounting scandal. Increasingly nervous Satyam customers are looking for alternatives in case the scandal-scarred outsourcer is unable to restore internal stability or find a buyer. Last month, the United Nations said it planned to terminate its contracts with Satyam and bar the outsourcer from bidding on future work.
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