A major software developer from India that works with Fortune 500 American corporations has been caught in a huge financial scandal that threatens the survival of the company. Satyam Computer Services Ltd. founder B. Ramalinga Raju and his brother and co-founder B. Rama Raju were taken into custody on criminal conspiracy and forgery charges over the weekend as part of a fraud investigation that has been described as India's biggest corporate scandal.
Ramalinga Raju last week admitted overstating profits--and creating a fictitious cash balance of more than $1 billion--over several years by inflating the amount of debt owed to the company and understating liabilities. Satyam is India's fourth largest IT firm and a major software exporter. The company's clients include firms such as General Electric Co., General Motors Corp., Nissan Motor Co., Applied Materials Inc., Caterpillar Inc., Cisco Systems Inc. and Sony Corp. None so far have said they have pulled any business from Satyam.
For more on this scandal:
- see this New York Times article [1]
Links:
[1] http://www.nytimes.com/2009/01/11/business/worldbusiness/11satyam.html?ref=technology