South Asia Investor Review

Investors of Indian Companies controlled by families are growing suspicious in the wake of the Satyam scandal involving the Raju brothers. Older brother Ramalinga Raju served as chairman and younger brother Ram Raju was managing director of Satyam. B. Ramalinga Raju admitted he had a fictitious cash balance of more than $1 billion on Satyam balance sheet and said in a letter of resignation that he overstated profits for the past several years, overstated the amount of debt owed to the company and understated liabilities. Eventually, he said, the scheme reached "simply unmanageable proportions" and he was left in a position that was "like riding a tiger, not knowing how to get off without being eaten." In the aftermath of the Satyam scandal described as "India's Enron", shares of the energy giant, Reliance Industries, controlled by one Ambani brother , are down 19%. The smaller listed Reliance units have likewise been punished in the market. Reliance ...

Satyam Computer Services Ltd., considered the poster child of India's information technology age, has shocked the world with a scandal of major proportions. The chairman of Satyam , a name that literally means "truth" in Sanskrit, said he cooked up key financial results, including a fictitious cash balance of more than $1 billion, raising doubts about the IT revolution hype in India that has attracted many international companies and significant foreign investments to the nation of over one billion people. The Wall Street Journal is reporting that B. Ramalinga Raju, founder and chairman of Satyam Computer Services Ltd., said in a letter of resignation that he also overstated profits for the past several years, overstated the amount of debt owed to the company and understated its liabilities. Eventually, he said, the scheme reached "simply unmanageable proportions" and he was left in a position that was "like riding a tiger, not knowing how to get off with...