Satyam India's own Enron scandal: Analysts
With Satyam Computer's Founder-Chairman Ramalinga Raju disclosing financial bungling worth thousands of crores at the country's fourth largest IT firm, analysts termed the entire episode as "India's own Enron scandal".business Updated: Jan 07, 2009 16:39 IST
With Satyam Computer's Founder-Chairman Ramalinga Raju on Wednesday disclosing financial bungling worth thousands of crores at the country's fourth largest IT firm, analysts on Wednesday termed the entire episode as "India's own Enron scandal".
They also termed Raju as India's Bernard Madoff, who has been charged in the US for fraud worth billions of dollars through a 'Ponzi' scheme, where money is taken from new investors to pass it on as returns for the older investors.
Admitting that Satyam's financials were being inflated over the past years, Raju disclosed irregularities to the tune of about Rs 8,000 crore, in its balance sheet and financial results, and said he was ready for the laws of the land and to face the consequences.
"We have witnessed everything bad but not as bad a scam like this. It has become India's own Enron till date," Ashika Stock Brokers' Research Head Paras Bothra said.
"Raju has relieved the burden on his conscience by bringing to light one of the biggest-ever frauds in Indian corporate history," analysts at another brokerage house Angel Broking said while terming the episode as India's Enron.
Before going belly-up in late 2001, Enron was one of the world's leading energy company, with over 20,000 employees, and had claimed over 100 billion dollar of revenue in 2000.
Enron was termed as "America's Most Innovative Company" for six consecutive years, before it came to the light in end of 2001 that the company's reported financial condition was sustained mainly by institutionalised, systematic and creatively planned accounting fraud, making Enron a symbol of wilful corporate fraud and corruption.
Satyam, which has close to 53,000 employees and is the country's fourth biggest IT firm, has also won various innovation accolades and awards for its corporate governance.