In the news: Satyam nosedives as Raju admits fraud

Happy New Year to all the readers. I'd taken a week's break and now it's back to the posting board.

Today's airwaves are full of Satyam founder R. Raju's resignation after admitting a massive financial fraud. In a letter to the Board of Directors, Raju explains how there is a huge mistmatch in the actual operating profits and that reflected in the books - apparently inflated profits have been shown for the past several years. In fact, the deal with Maytas (which broke down as we all know) was a last-ditch attempt to bridge the gap with real assets instead of the fictitious ones. What's more none of the board members had an inkling of what was going on.

The consequences: Satyam shares plunged by 80% (!!) after market sentiments understandably turned bearish - the BSE is back at around the 9,500 mark after a good start to the year had seen the sensex rise upwards of 10k again. The Nifty is also down today - by over 7 percent. The Ministry of Corporate Governance will look into the matter along with SEBI, and things don't look bright for either Satyam or its founder. Ram Mynampati, who took over as Interim CEO of the company, has released a statement saying that they will explore all avenues to secure the future of the copmany and he also reaffirmed the company's commitment towards associates, customers and shareholders. We'll have to keep a tab on how this story unfurls.

Another list of terms - Assets, bonds, stocks and securities

We went through derivatives yesterday, so the focus is on assets, bonds and stock exchange today.

Assets are everything of value, owned by a person or company.

• Tangible Assets - financial and fixed assets including bonds, stocks, cash, building, equipment etc
• Intangible Assets - nonphysical resources and rights such as copyrights, trademarks, patents etc

Bond is simply a loan - in the form of a security wherein the issuer owes the holder a debt and has to repay the holder (along with interest) at a later date, known as maturity.

Securities are negotiable instruments representing financial value. Categorised into debt securities and equity securities.

Stocks is often looked at as a synonym of shares. The share of a stock means a share of ownership in a company. Stocks can also refer to different financial instruments such as government bonds or securities.

Stock Exchange or Securities Exchange or bourse (European) is a corporation or mutual organisation which provides trading facilities to exchange stocks and other securities.