SATYAM ASATYAM

Financial market was awakened to a cruelest truth today morning ironically by company named as "Satyam". Prices have stumbled on the Dalal street from Rs.180 to Rs40 almost dropped by 80%.
It was started with resignation letter in the morning by Satyam's chairman along with his so called 4 page "Confession letter".He has cooked up his accounts by inflating companies cash and bank balance about Rs.5040
crores ,accrued interest by Rs.376 crores , overstated their debtors by 490 crores and understated their liabilities by Rs1230 crores ( I wonder what their auditors PWC were doing all these years...Sleeping ....may be they were working in tandem as far as these fictitious accounting is concerned....He also states that company was running at a operating margin of 3% as against 24% as stated.Operating margin of 3% for any company is low leave alone software companies which generally runs at a margin of 25% - above.Then something is fundamentally wrong in this companies .Strangely Interim CEO comes out with a statement that their Business model is good and everything is fine with the company.
Satyam has destroyed its brand and trust which took 20 years in just 20 minutes.It has not only shaken the investors confidence but also faith of the FIIs and others .It is now being dubbed as India 's Enron and few heads will roll for sure and top honchos will be answerable for all questions raised putforth and auditors are to be equally blamed for this fiasco and they should be punished for their act or non-act.This could not have come at wrong time than this .Already , there is less investor's confidence to invest in the market and to get to know that accounts are being cooked by the company it has not only shaken the confidence but also destroyed it.It is not that Satyam is the only company which had cooked its books of account , but the fact that if company like Satyam has done it then what is the case of other companies in reliance group who are known for notoreity.It has to be checked whether this case has opened a "Pandora's Box" or just a isolated case.
The issue has serious repercussions.It is going to haunt the investors and IT industry in particular for a long time.But regulatory body has a role to play starting with SEBI, MCA,ICAI ,ICSI etc.Only with their quick actions they will be able to restore the confidence of investors and general public at large." Adversity gives the opportunity". Hopefully, this crisis will handled in a better manner .But, there is also possibility of SOX like compliance coming in India too.
Lets See and hope for the best in this hour of truth ....