New Delhi: A special court in Hyderabad found all the ten accused in the Satyam scam guilty of cheating, forgery, destruction of evidence and criminal breach of trust. This includes the founder and the Chairman of the company B Ramalinga Raju as well. The court pronounced a seven year-jail term for the founder and also imposed a Rs 5 crore fine on Raju.
The decision came more than six years after the scam first came to light. On January 7, 2009, Raju wrote a letter to the Board Of Directors of Satyam Computer Services, in which he admitted to cooking the books of the company. A copy of the letter was sent to the stock exchanges as well as the Securities and Exchange Board of India.
In this letter Raju admitted to inflating the cash and bank balances of the company by Rs 5,040 crore.
The company’s total assets as on September 30, 2008, stood at Rs 8,795 crore. Of this cash and bank balances stood at Rs 5,313 crore which was nearly 60% of the total assets. This was overstated by Rs 5,040 crore. The company basically had cash and bank balances of less than Rs 300 crore.
Raju also admitted to fudging the last financial result that the company had declared, for the period of three months ending September 30, 2008. The company had reported revenues of Rs 2,700 crore, with an operating margin of 24% of revenues or Rs 649 crore. These numbers were made up. The actual revenues were Rs 2,112 crore with an operating margin of Rs 61 crore or 3% of the total revenues.