In a letter to the Satyam board members, Raju said that the company reported inflated revenues over years. He said that he feared takeover due to poor finance performance.
Coming clean on financial irregularities, he said that the company had Rs 1,230 crore worth of understated liability as of September 30.
His decision was conveyed to the company’s board members. The company was supposed to hold a board meeting this Saturday.
Even since announcing the controversial Maytas deal, Raju was under pressure from investors as the decision raised issues over corporate governance.
In a dramatic revelation, Raju said that the balance sheet has inflated cash & bank balance of Rs 5040 crore. No board member had any knowledge of the real situation as against books. The balance sheet was inflated and accrued interest of Rs 376 crore in the books is non-existent.
He said in the letter that Rs 1230 crore was arranged to Satyam, which is not reflected in books. Ram Mynampati will act as interim CEO. Merrill Lynch can be entrusted to explore the merger options. Raju asked auditors for restatement of accounts in the light of new facts.
Raju in his letter further said that the Q2FY09 reported revenues of Rs 2700 crore Vs actual revenue of Rs 2112 crore. The Q2FY09 operating margin reported was Rs 649 crore against Rs 61 crore. The Q2FY09 numbers had Rs 588 crore of artificial cash in books.
Find Satyam’s chairmen resignation letter -> satyam_computer_services_ltd_07010911