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Satyam chairman admits to fraud, resigns

CNN-IBN
Jan 07, 2009 at 07:47pm IST

New Delhi: Satyam Chairman, Ramalinga Raju has admitted to fraud, but the scent of a scam has been in the air since mid-December last year when Satyam's bid to buy the family-owned Maytas Properties and Infrastructure failed. Here is the chain of events leading up to Wednesday's admission.

December 16: Satyam Computers announces it is buying 100 per cent stake in two companies owned by Chairman Ramalinga Raju's sons - Maytas Properties and Maytas Infra. The $1.6 billion dollar deal comes in for severe criticism from investors and analysts, dubbed one of the worst corporate governance events in India.

December 17: Under pressure Satyam does a U-turn and 12 hours later, the deal is off.

At that time, Ramalinga Raju said, "I would like to make this clear to every one that reason we are calling off the deal is totally on account of the fact that the reaction of the sum off the investors to the diversification has not been favourable and that is the whole reason."

But the damage was already done. The company's shares were pounded on the bourses and it lost $2 billion on the New York Stock Exchange.

December 23: The World Bank confirms it has banned Satyam for eight years for bribery and data theft.

December 26: The Maytas deal takes its first toll - independent director Mangalam Srinivasan resigns.

December 29: Three more independent directors resign.

* Dean of ISB - the man who chaired the board meeting which cleared the controversial Maytas deal - M Rammohan Rao quits.

* Pentium chip inventor Vinod Dham

* Krishna Paleppu

The company's board meeting is defered to December 10.

January 7, 2009: Ramalinga Raju resigns, admits to fraud. He says the company's cash and bank balance sheet has been inflated and fudged to the tune of Rs 5,040 crore.

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