Satyam Computer’s Chairman B Ramalinga Raju resigned after admitting to major financial wrong-doings and saying his last-ditch efforts to fill the “fictitious assets with real ones” through Maytas acquisition failed.

The beleaguered IT giant, already under scanner over the aborted acquisition of firms promoted by the chairman’s family, received a rude shock days ahead of its January 10 board meeting, with Raju stepping down along with his brother and Managing Director B Rama Raju.

Under attack over $1.6 billion acquisition fiasco of firms promoted by his family Satyam Computer Chairman B Ramalinga Raju on Wednesday resigned and said he would subject himself to the “laws of land”.

Minutes later, the company also announced resignation of its managing director B Rama Raju.

“It was like riding a tiger, not knowing how to get off without being eaten,” Ramalinga Raju said in a letter to Satyam’s Board of directors, wherein he listed major financial wrong-doings over the years to inflate the profits.

Noting that every attempt to eliminate gaps in balance sheet, purely on account of inflated profits over several years, failed, Raju said: “I am now prepared to subject myself to the laws of the land and face consequences thereof.”

Low percentage of promoter equity in the company, where four independent directors resigned in the last two weeks over the acquisition fiasco, could lead to a takeover and expose the gap, he said in the letter, also sent to regulator SEBI. The promoters’ share in Satyam has now dipped to just over 3% that too is pledged with lenders.

Shares of Satyam plunged by over 50% immediately after the announcement of resignations, necessitating an overhaul of the Board and management.

Raju will continue as chairman till the Board finds a replacement, even as speculation was rife that Satyam President Ram Mynampati would take over as chairman.

Rama Raju would also continue as Managing Director, but only till the time the Board is expanded.

Fraud of this nature should not go unpunished. Not only should those responsible be jailed, but since this financial fraud will be jeopardizing the livelihood of lakhs of people, stiff action should be taken against the one’s responsible for such crime.

Read Raju’s full text letter to the board

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