Satyam Computer skids a day after post-fraud results

MUMBAI - The shares of Satyam Computer Services skided Friday, a day after its new management unveiled its results following a shocking $1.75-fraud perpetrated by its erstwhile promoters that had surfaced in January 2009.

The shares of the company, now renamed Mahindra Satyam, opened lower at Rs.94.80- also the intra-day high - against the previous close at Rs.98.90, and fell to Rs.90.10 soon after.

Some four hours after the opening bell, the scrip was ruling at Rs.91.30 with a significant loss of 7.68 percent over the previous close, data available with the Bombay Stock Exchange showed.

This was the first session of trading after the new management unveiled its results for the first time since January.

The new management said financial irregularities caused by its former chairman B. Ramalinga Raju had resulted in a Rs.78.55-billion ($1.75 billion) impact on the company’s accounts.

“The fictitious revenue was recorded by creation of false invoices by circumventing the normal revenue recognition cycle,” said the filing signed by Chairman Vineet Nayyar on behalf of the new board of the company.

The irregularities covered various heads, including revenue, interest income, exchange fluctuations, salary costs, other expenses, bank borrowings and interest, as also tax payments, as per the report presented to the stock exchanges.

Once the poster boy of Indian information technology industry, Raju had stunned the corporate world in January last year when he admitted to the irregularities over the past several years in the largest corporate fraud yet in the country’s history.