Mahindra Satyam shares tumble on new charges
Posted on: 11:15 PM IST Nov 25, 2009
Mumbai: Shares in Mahindra Satyam fell 11 per cent to a five-month low on Wednesday after Federal Investigation Agency filed new charges over an accounting fraud that hit the company earlier this year.
The Central Bureau of Investigation said it had filed on Tuesday a supplementary charge sheet containing new allegations against former chairman Ramalinga Raju and nine others associated with the outsourcing firm, which was then called Satyam Computer Services.
The agency said the new charges included that revenues had been inflated by 4.3 billion rupees ($95 million) by creating fake invoices and customers, and that forged board resolutions were used to get loans worth Rs 12.2 billion rupees.
Shares in the company ended down 10.9 per cent at Rs 90.55, their lowest close since July 17, in a Mumbai market that rose 0.4 per cent.
"The stock got hammered because of CBI saying the fraud could be larger than earlier estimates," said a portfolio manager for portfolio management services at Motilal Oswal, Manish Sonthalia.
Satyam was hit by country's largest corporate scandal when founder and chairman Raju quit in January, revealing profits had been overstated for years.
The fraud left Satyam struggling for survival. In April, Tech Mahindra won an auction for a controlling stake in the troubled firm.