On Friday, Indiainfoline.com reported that Satyam Computer, one of the more popular IT companies in the country had failed to be entirely transparent about its disclosures. Nearly two years ago, in the course of putting through a set of complex mergers, the management had allotted a large number of shares at par to the brother-in-law of Satyam's main promoter, Ramalinga Raju. The benefit to him is estimated at over Rs 1500 million and had he sold the shares at their peak value of over Rs 7000 just over a month ago, the benefit could have been as high as over Rs 5000 million.Anyone have a link to the online version of the India Infoline article? I have the content through a group post.
The report was picked up by television channels and led to a pandemonium at the company's annual general meeting at Hyderabad on Friday when angry shareholders demanded an explanation. The share price dropped 12 per cent on Friday and continued to fall on Monday when the management failed to come out with a credible explanation for its actions.
The 2000 Satyam fiasco
Sucheta Dalal mentioned it in an article in May 2000: