BANGALORE, INDIA: Amidst rumors that Satyam Computer Services is heading for a management change following the recent controversies, Ramalinga Raju, the chairman, and B.Rama Raju, managing director of the troubled IT company have put in their papers on Tuesday.
In a letter to the board members, Ramalinga Raju confessed that there were some misappropriations in the balance sheet as of September 30, 2008.
He said the company had Rs 5040 crore of "inflated" cash on its balance sheet at the end of September 30.
He said the gap in balance sheet has risen purely on account of inflated profits over a period of last several years.
"What started as a marginal gap between actual operating profit and the one reflected in the books of account continued to grow over the years," the letter said.
"Every attempt made to eliminate the gap failed. As the promoters held a small percentage of equity, the concern was that poor performance would result in a takeover, thereby exposing the gap. It was like riding a tiger, not knowing how to get off without being eaten," he confessed in the letter.
Raju said the aborted Maytas acquisition deal was a last attempt to fill the fictitious assets with real ones.
Coming clean on financial irregularities, he said that the company had Rs 1,230 crore worth of understated liability as of September 30.
For the quarter ended September 30, Satyam had reported a revenue of Rs 2700 crore, whereas the actual amount was Rs 2,112 crore.
Raju also said that he was tendering his resignation as the chairman and shall continue in this position only till the current board is expanded.
"I am now prepared to subject myself to the laws of the land and face consequences thereof," he clarified in the letter.
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