VAR Satyam's CEO Arrested, Board Dissolved
In a Jan. 8 letter to Satyam's board of directors, the former CEO noted the solution provider's balance sheet carried, "Inflated non-existent cash and bank balances an accrued interest which is non-existent and other irregularities," according to Reuters.
The Rajus were arrested on charges of criminal breach of trust, criminal conspiracy, cheating, falsification of records and forgery, Reuters said.
The former CEO allegedly inflated Satyam's cash and bank balances by $1 billion.
Analysts have noted that this may be the beginning of the end for the IT firm, and the revelation is likely to impact not only Satyam's vendors and customers, but also will send shockwaves throughout the Indian IT service-provider world.
Earlier Friday, India's government dissolved the board of directors, and announced it would appoint new members, in an attempt to mitigate the effects of the corporate scandal, Reuters said. The new board is expected to meet within seven days.
In a statement, the company said, "We welcome this decision which will ensure uninterrupted operations and restore the confidence of all employees, customers and shareholders across the globe."
Satyam's interim chief executive is Ram Mynampati. Reportedly, there is no current move to take over Satyam's management.