The Satyam Computer scam just got bigger, hitting the nascent recovery of the company's stock on the bourses, again.
In fact, the scam has almost doubled, thereby indicating that B. Ramalinga Raju, former chairman, who is now in jail, through his confession, was still facing some insurmountable obstacles in speaking the truth.
Raju had quit on January 7, 2009 after admitting that he had indulged in fraud by inflating the company's profits and siphoning off huge amounts for personal gain, for years. It caused the stock to crash and put a question mark over the existence of the company, till it was bought by Tech Mahindra.
Far from being a mammoth Rs 7,800 crore as reported earlier, the scam has crossed the Rs 14,000 crore mark, as per the most recent Central Bureau of Investigation charge sheet.
What has added to the uncertainty facing the company and the stock, has been the arrest of the Company Law Board acting chairman, R Vasudevan, who has been overseeing the progress of the Satyam scam. Vasudevan was arrested after being caught red handed accepting a bribe of Rs 7 lakh to influence an unrelated case. A total sum of Rs 55 lakh was recovered from his residence.
Mahindra Satyam stock (Satyam was taken over by Tech Mahindra through an auction process and re-christened thereafter) has gone into a freefall on Wednesday. It has fallen over 11 per cent on the BSE and by over 10 per cent on the NSE by the afternoon. The volume of shares traded were huge on the NSE at 72,294,314, while on the BSE they were at 28,267,361.
The extent of volatility experienced by the stock since the scam was unveiled can be gauged from the fact that its 52-week high is Rs 251 on the BSE and is almost similar on NSE, while its 52-week low is just Rs 11.50 on the BSE, while it fell to Rs 6.30 on the NSE.
Its consolidated turnover for the second quarter of the current fiscal was Rs 2,819.29 crore, while in the first quarter it was 2,620.83 crore. Net profit was Rs 580.85 crore in Q2 and in Q1 it was Rs 547.70 crore. Its operating profit was Rs 730.50 crore in Q2. Its earnings per share (EPS) in Q2 was at 8.63. The stock's 1-year return is -61.30 per cent.
Tech Mahindra stock too was down by almost 5 per cent, powered, perhaps, by the as-yet unfolding Satyam case that is getting larger with time and that is creating further uncertainty as to the extent of the bill that it may have to ultimately foot for acquiring Satyam.