After an 87% drop in the share price of Satyam last week on the arrest of some of its board members including the financial director, Vadlamani Srinivas, with the charge of falsifying accounts, the price rallied back 44% today with the announcement of a rescue plan and the appointment of new directors.
The false accounting was an overstatement of cash reserves by $1 billion dollars which was done pretty much by moving the decimal point by one place. $0.11 billion become $1.1 billion
Deepak Parekh, one of the new directors, is currently appointing a new set of accountants and hopes to have restated accounts made public in the near future. A fast response is required to restore confidence.