On the back of investigation order issued by a local judicial magistrate of an economic offence court, the Registrar of Companies (RoC) along with market regulator Securities and Exchange Board of India (SEBI) began the probe at Hyderabad, the company’s headquarter on Thursday.
The team of SEBI and RoC reportedly reached Satyam’s office on Thursday evening armed with the court order to search, collect and seize the documents to prevent any sort of forgery. The Ministry of Corporate Affairs had directed the RoC to invoke section 234A of the Company’s Act under which RoC could search, collect and seize the documents for probing the Satyam case.
The action was initiated just after a day of Satyam’s founder and Ex-Chairman B Ramalingum Raju’s confession of manipulating the Company’s balance sheet with inflated data on Wednesday. He had already resigned from the post.
According to report, the investigating team also went to the office of PricewaterhouseCoopers (PwC) – World’s largest accounting and business Consultancy Company – for investing the involvement of forgery balance sheet case of Satyam. As it is known that this reputed organisation were auditing company’s account since long time.
On the same day of investigation operation, Ram Mynampati, the interim chief executive officer and one of the directors, addressed to media and informed the latest development in the company.
Responding to media on the speculation of Ramalingum escaping abroad or became underground, Mynampati said that he (Ramalingum Raju) was still in city and also in continuous touch with them.
Admitting the problem of liquidity crunch and payment of employees, Ram said that company was looking for a strategic investor for raising liquidity. In this regard, company is convening a general body meeting on January 10. He also said that company had paid the salary of its employee for December but was not sure whether all employees would be paid for January. Moreover, he was not confirmed about the veracity of the company’s account. After scrutinizing the balance sheet and re-auditing he can evaluate about the real asset of the company, he added.
Informing to media, Mynampati said the CFO (chief financial officer) V Srinivas had resigned and company would have to appoint an interim CFO or hire from outside. While PwC would continue the auditing, he added.
Stressing on to save the company’s fate, Mynampati said, ‘Our first priority is to save the company and to remain its business operations. For this we are looking for investors to buy the stake of company.’
The stock of Satyam dipped to Rs.13.50 today from Thursday’s Rs.39.95 (over 50% depreciation) but later managed to recover 10% and closed at Rs.23.85, a 40% intraday loss. Since Monday, its price has plunged from Rs. 179 to Rs. 23.85, a major fall of 87% in a week.
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