Did Sir Walter Scott have a premonitory dream about Ramalinga Raju? From criminal investigators and serious fraud investigators to forensic accountants, the accounts of Satyam Computers remain a puzzle. Most people in India and other countries agree that this is the moment for investors, regulators and lawmakers to take decisive action.

How could this have happened?
Satyam's sales grew consistently over the past ten years, as did its reserves. Why did no one - namely the auditors - question such consistency in the face of the Indian Rupee appreciation against the US Dollar in 2007 and 2008?

Another issue was the growth of cash balances that were extremely high. Yet again, this did not draw much attention. A quick look at the key fi nancial ratios given in Table 1 shows that this was a company with very high returns and profi t margins with very strong cash levels and unusually high effi ciency of asset utilisation.

Then, what really went wrong?
In his confession on January 7, 2009, Raju said that the audited fi nancial results as declared on September 30, 2008, contained "infl ated (non-existent)" cash and bank balance of Rs 5,040 crore (as against Rs 5361 crore refl ected in the books), an accrued interest of Rs 376 crore which is non-existent, an understated liability of Rs 1,230 crore on account of funds arranged by him and an overstated debtor position of Rs 490 crore (as against Rs 2651 refl ected in the books).