Satyam will pay US$10M to settle US fraud charges

The company is aiming at relisting on the New York Stock Exchange

Indian outsourcer Satyam Computer Services has agreed to pay a US$10 million penalty to the U.S. Securities and Exchange Commission (SEC) to settle charges of financial fraud, the SEC said.

Satyam was plunged into crisis in January 2009, after the company’s founder, B. Ramalinga Raju, stated that the company’s revenue and profit figures had been inflated for several years. The Indian government took charge of the company soon after, ordered the accounts re-stated, and selected another outsourcer, Tech Mahindra, to invest in Satyam.

India authorities also filed criminal charges against several former company executives, including Raju.

The SEC charged Satyam on Tuesday with fraudulently overstating the company’s revenue, income and cash balances by more than $1 billion over five years. The complaint, filed in the U.S. District Court in Washington, D.C., alleges that former senior officials at Satyam used false invoices and forged bank statements to inflate the company’s cash balances and make it appear far more profitable to investors.

Satyam's new leadership cooperated with the SEC investigation, which continues.

Satyam’s former senior managers created more than 6,000 phony invoices to be used in the company’s general ledger and financial statements, according to the SEC complaint. Satyam employees created bogus bank statements to reflect payment of the sham invoices, it added. This resulted in more than $1 billion in fictitious cash and cash-related balances, representing half the company’s total assets, the SEC said.

Besides agreeing to pay the $10 million penalty, Satyam has also agreed to train company officers and employees concerning securities laws and accounting principles, and improve its internal audit functions. Satyam also agreed to hire an independent consultant to evaluate the internal controls the company is putting in place, SEC said.

The settlement with the SEC will help Satyam relist on the New York Stock Exchange, after it is done with restating its accounts in accordance with U.S. accounting rules. It expected to restate the figures in about eight months.

The company delisted its American depository receipts from the New York Stock Exchange last year as it could not meet an Oct. 15 deadline to file accounts. Its shares continue to be listed on Indian stock exchanges.

In a related settlement, SEC said it sanctioned Satyam’s former independent auditors for alleged violations of U.S. federal securities laws and improper professional conduct while auditing the company’s financial statements from 2005 through January, 2009.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issuestelephonysatyam computer servicestelecommunicationSEC Filingsfinancial resultsFinancial regulation and compliancebusiness management

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?