Mahindra Satyam, one of India’s largest software outsourcing companies, announced losses of 1.25 billion rupees, or about $28 million US dollars for the fiscal year ending March 2010.
The company’s financial results were the first in almost two years, and were highly anticipated by investors.
In January 2009, the company was hit by a massive scandal when chairman and founder Ramalinga Raju said that profit announcements had been falsely hiked up and company assets worth up to $1.5 billion had been falsified in a fraud that included investing in real estate without informing company investors.
Satyam was purchased by Tech Mahindra, a well-known Indian tech company, about two months later and renamed Mahindra Satyam. Tech Mahindra said that it would operate Mahindra Satyam as a separate company, and would not be able to merge completely unless readjusted results for the fiscal years of 2009 and 2010 were taken into consideration.
While the company announced a loss and its stock took a beating, several business analysts remained optimistic about Mahindra Satyam’s future. The company is sitting on cash worth about $485 million U.S. dollars, and remains debt-free. In addition, Mahindra Satyam made a profit for the year, but was mostly in the red due to a loss of assets due to “exceptional items,” most likely related to the investment fraud.
The company’s results had some effect on the Indian stock market, which has been surging in recent months; the BSE Sensex ended slightly below 20,000 after Mahindra Satyam announced its results.
The company’s financial results were the first in almost two years, and were highly anticipated by investors.
In January 2009, the company was hit by a massive scandal when chairman and founder Ramalinga Raju said that profit announcements had been falsely hiked up and company assets worth up to $1.5 billion had been falsified in a fraud that included investing in real estate without informing company investors.
Satyam was purchased by Tech Mahindra, a well-known Indian tech company, about two months later and renamed Mahindra Satyam. Tech Mahindra said that it would operate Mahindra Satyam as a separate company, and would not be able to merge completely unless readjusted results for the fiscal years of 2009 and 2010 were taken into consideration.
While the company announced a loss and its stock took a beating, several business analysts remained optimistic about Mahindra Satyam’s future. The company is sitting on cash worth about $485 million U.S. dollars, and remains debt-free. In addition, Mahindra Satyam made a profit for the year, but was mostly in the red due to a loss of assets due to “exceptional items,” most likely related to the investment fraud.
The company’s results had some effect on the Indian stock market, which has been surging in recent months; the BSE Sensex ended slightly below 20,000 after Mahindra Satyam announced its results.
Friends Read Free