Satyam Slides After Chief Says May Have Cash Crunch (Update1)
By Andrea Tan
Jan. 9 (Bloomberg) -- Satyam Computer Services Ltd., plunged to a record low for a second day in Mumbai trading on concern it may run out of money after Chairman Ramalinga Raju said he falsified the accounts.
Satyam dropped 55 percent to 18.2 rupees as of 10:36 a.m. in Mumbai, after sliding to as low as 6.3 rupees earlier. The stock tumbled 78 percent on Jan. 7 after Raju said he inflated earnings and assets by $1 billion. The Bombay Stock Exchange’s Sensitive Index fell 1.4 percent today.
Interim Chief Executive Officer Ram Mynampati said yesterday Satyam, the Indian computer-services provider, may have to restate earnings and he couldn’t be sure the company had enough cash for this month. The Hyderabad-based software maker’s liquidity position is not very encouraging, Mynampati said.
Citigroup Inc. has frozen more than 30 bank accounts at Satyam, probably to protect the bank’s $70 million in loans to the Indian software company, the Economic Times reported today, citing people it didn’t identify.
Satyam, which counts ArcelorMittal, the world’s largest steelmaker, and Nissan Motor Co., Japan’s third-biggest carmaker, among its customers, was removed from the National Stock Exchange’s main Nifty index starting Jan. 12 after the benchmark slumped 6.2 percent. The software provider will also be replaced on the benchmark Sensex from Jan. 12, the Bombay Stock Exchange said on Jan. 8.
Satyam’s American depositary receipts fell $8.42, or 90 percent, to 93 cents before the opening of the New York Stock Exchange on Jan. 7, which then halted trading in the stock.
The Indian stock market was closed for a holiday yesterday.
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