MUMBAI (AFP) – The head of one of India’s biggest outsourcing firms, Satyam Computer, resigned on Wednesday amid a scandal over a billion dollar fraud that sent company stocks tumbling 70 percent.
Company founder and chairman B. Ramalinga Raju admitted the Hyderabad-based software services firm had falsified accounts and assets and inflated its profits.
“The gap in the balance sheet rose purely on account of inflated profit over a period of several years,” Raju said in a statement.
The company showed inflated cash and bank balances of 50.4 billion rupees (1.03 billion dollars) in its September-end balance sheet.
Satyam shares tumbled 70.41 percent, or 126.1 rupees, to 53 rupees on the Mumbai Stock Exchange Wednesday afternoon, as investors dumped the company.
Satyam had announced the 1.6-billion-dollar buyout of the Maytas infrastructure firms earlier this month, but abruptly reversed its decision after investors rejected the plan.
Satyam had planned to complete the Maytas acquisition deal “as the last attempt to fill fictitious assets with real ones”, Raju admitted in the statement.
Late last year the World Bank also barred Satyam from doing business with it for eight years over “improper benefits” paid to staff.
Satyam Computer Services is a leading software consultancy, system integration and outsourcing firm with clients across 65 countries.