The markets saw a sharp fall in the previous two hours of trade after the news of falsification of Satyam’s financial statements broke out. Selling is being witnessed across sectors with realty and IT stocks leading the fall.
Chairman of Satyam, Mr. B Ramalinga Raju, has tendered in his resignation to the company. He has confessed that the company has inflated cash balances of Rs 50.40 bn and accrued interest of Rs 3.76 bn, which were non-existent. This discloser exposes the malicious intension of the promoters of the company. It also raises the serious issue of forgery for which company will have to face legal action. This development maligns the company’s image and affects client’s confidence. New clients will shy away from the company and existing clients might reconsider the continuation of their contracts. The stock of Satyam is trading weak on the bourses.
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