Have you heard about Satyam Scam! It is one of the biggest ever corporate accounting scam in India.
In 1987, Ramalinga Raju and his brother Rama Raju started a company together called Satyam computer service ltd. It is Hyderabad based IT company. It was listed on BSE in 1990-91. Satyam computers is known as jwel of IT company but in reality this company is an outcome of financial crime.
Satyam computers was one of the fastest growing company in India. It was growing rapidly. But the real estate boom caught an eye of Ramalinga Raju as Real estate rates were increasing and the sector was touching it’s new height. As a result, Ramalinga started purchasing lands in different cities. He started his own companies, Maytes infrastructure and maytes properties and was purchasing land on the name of these companies as well as his family members. He got addicted to buy properties.
When he got shortage of money to purchase properties then he started manipulating the financial statements of Satyam computers. For example, if the company is gaining the profit of Rs 50 Crore, he was showing the profit of Rs 500 crore in financial statement.
He manipulated companies revenue, operating profits, interest liabilities and cash balance. He was showing that satyam computers is growing very fast. And thus by seeing the fake growth and profits the share price of satyam computers started increasing. With the increasing shares Raju and his brother started selling their shares and took loan by renting rest of the shares. They use this money for purchasing rental properties. Even he made some of his farm workers director of his company and purchased properties by their names as well. He was buying properties aggressively
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