Sunday, January 11, 2009

More on Satyam Computer

The stock, SAY was halted on the NYSE after trading under a buck, but since then the entire board has been canned and the Indian government has aggressively stepped into the situation.

Furthermore, 12% of the outstanding stock was bought, and taken delivery off the last couple of days in India.

Two of India's largest IT companies said that they wouldn't poach Satyam's clients, but that they wouldn't say no if the customer insisted.

India is looking if money was siphoned off from Satyam into Maytas owned by Satyam's chairman B. Ramalingu Raju. And Raju, a known thief, in his resignation letter said he benefited by not one cent in this fraud. Now it looks like a billion dollars:

NEW DELHI: With preliminary indications pointing to the startling fact that the profits of Satyam Computer Services were diverted to fund the entire activities of Maytas Infra. including buying land within the state and elsewhere in the country, the Andhra Pradesh government has decided to seek a CBI enquiry into the fraud committed by B Ramalinga Raju.

After all Satyam, with a non existent $1 billion dollars was supposedly going to purchase the two companies for cash. These companies have gotten government infrastructure projects, and it would be easier to explain if the money was just siphoned off into another company. Didn't Satyam just win an award for corporate governance?

All speculation and wishful thinking aside on the share price of Satyam or the extent of the fraud, we do know that the IT industry and the 53,000 jobs at Satyam are very important for India's economy.

And if Satyam's recovery is a proxy on India's IT industry, then speculators will probably spend their spare change on a chance Pollyanna lives in India.

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