Thread by @stocktalk_in

📕 THE SATYAM SCAM

🔸 On the morning of 7th January 2009, Ramalinga Raju, Chairman of Satyam Computers submitted a letter to the board of directors.

🔸 In the letter, he openly confessed of committing a fraud of ₹7,000 crore over a period of 5 yrs.

Here's the letter 👇

{1/4}

🔸 Satyam Computers was a company listed on Indian as well as US stock exchanges (ADRs).

🔸 When the news of the letter broke out, it sent out shock waves throughout the stock markets.

🔸 Satyam stock fell 80% that day from ₹185 to ₹35.

🔸 Next day, stock fell to ₹6.

{2/4}

🔸 As part of the scam, Raju generated fake invoices to show inflated revenues.

🔸 He showed bank balances of ₹5,000 crore that was non-existent.

🔸 He kept on rolling money in rounds and kept doing the scam for 5 years.

🔸 He was immediately arrested by the police.
{3/4}

🔸 When the 2008 financial crisis broke out, it sucked out the liquidity from the market and so Raju could not continue to run his scam.

🔸 Moral of the story:
In the stock markets don't believe anyone. Do your own research and analysis. Only that will build conviction.

{4/4}