The CEO of one of India’s largest outsourcing companies, Satyam (Irony alert: the word means “truth” in Sanskrit), has resigned in what may be the country’s largest case of corporate fraud. Analysts are likening it to the Enron scandal. The New York Stock Exchange halted trading on the stock after the news broke.
Ramalinga Raju, company founder and now ex-CEO, announced in a statement that about $1 billion (or 94%) in cash on the company’s book was fictitious.
The company’s auditors, US-based PricewaterhouseCoopers, said they are “looking into the matter.”
The World Bank, one of the firm’s major clients, recently cut off business relations citing “improper benefits” given to Bank officials.
The company was recently recognized with a “Golden Peacock” award for corporate governance by an Indian business association.
Early reports indicate that the accounting scandal could spread quickly to other firms and imperil India’s huge outsourcing industry.