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B. Ramalinga Raju, chairman of the scandal-plagued Indian outsourcing specialist Satyam Computer Services, has resigned, confessing that he had conspired to cook the firm’s books for several years.

In a letter to Satyam’s board, which was released Wednesday morning to the stock exchanges and market regulator, the Securities and Exchange Board of India, Raju owned up to inflating the firm’s cash and bank balances by $1 billion and fudging the firm’s revenues and operating margin in the quarter that ended in September 2008. The actual operating margin was 3% ($12.5 million), on revenues of $434 million, as against the incorrectly reported operating margin of 24% ($133 million), on $554 million in revenues. Debts were overstated by $100 million, and liabilities understated by $253 million.

Admitting that the gap in the firm’s balance sheet was caused by inflated profits over several years, Raju stated that he was afraid Satyam’s poor performance would result in a takeover, which would expose the gap (See: ''Scandal-Hit Satyam May Be In Play.'') ''It was like riding a tiger, not knowing how to get off without being eaten,'' his letter read, adding that neither the board nor any of the firm’s executives were party to the wrongdoing. He characterized an aborted deal to buy two construction companies controlled by his relatives, which had riled investors in December, as a last-ditch attempt to substitute fictitious assets with real ones (See: ''Satyam Tries To Make Ammends''.)

The confession sent the stock of Satyam Computer Services (nyse: SAY - news - people ) plunging by 138.70 rupees ($2.84), or 77.5%, to 40.25 rupees (82 cents), and pulled down the BSE Sensex 30 index by 749.05 points, or 7.25%, Wednesday. SEBI Chairman C. B. Bhave termed the development one of “horrifying magnitude,'' reported the Press Trust of India. He went on to say that the regulator would take legal action after conferring with the government. The New York Stock Exchange-listed Satyam could face action from the U.S. Securities and Exchange Commission as well.

Revelation of the accounting fraud has produced shock waves across India’s corporate world. “This is beyond the realms of my imagination. It’s a real shocker,“ said Rakesh Jhunjhunwala, chairman of the Mumbai investment firm Rare Enterprises. (Jhunjhunwala has no exposure to Satyam.)

“I just can’t believe this. It’s very difficult to digest,'' acknowledged Shailesh Haribhakti, executive chairman of audit and consulting firm BDO Haribhakti in Mumbai.

Ganesh Natarajan, chairman of the software industry association Nasscom, sought to allay fears that the Satyam fiasco would further damage India’s export-oriented software sector, which has already been dented by the financial meltdown and recession in the United States, its biggest market (See: India's Outsourcers Play Defense.'') ''This is a firm-level issue and won’t affect the entire IT sector,'' he said. “ But it does mean that corporate governance standards overall need to be relooked at with a microscope.''

Weak demand is further chipping away at Intel’s microchip business.

Early Wednesday, Intel (nasdaq: INTC - news - people ) announced preliminary fourth-quarter sales below its previously-announced estimates as the sale of microprocessors used in personal computers and inventory reductions fell as a consequence of weakening global demand. The Santa Clara, Calif.-based company said it now expected its top line figure to be approximately $8.2 billion, down 23.4% from year-ago sales of $10.7 billion, and below analyst estimates for sales of $8.7 billion.

Shares in Intel fell 4.6%, or 71 cents, to $14.66, in morning trading in New York.

"Clearly we are going to be in an ugly period for corporate earnings. That shouldn't be a surprise to anybody," said Tim Ghriskey, chief investment officer at Solaris Asset Management. "I think we are going to see announcements like this throughout the earnings season and especially this preannouncement period.”

In November, Intel had forecast sales of $9.0 billion, plus or minus $300.0 million, marked down from an even earlier forecast of $10.1 billion to $10.9 billion. Intel Chairman Craig Barrett had said in late November that the revision was final. (Watch "Intel Warns, Stock Drops.")

Intel also said it would post a fourth-quarter impairment charge of approximately $950.0 million related to its investment in Clearwire (nasdaq: CLWR - news - people ), a wireless broadband network operator which it has worked with in the development of the next generation of wireless data technology since 2006. (See “Intel's WiMax Bet.”) Intel expects the net loss from equity investments to be between $1.1 billion and $1.2 billion, compared with prior estimates of a loss of $50.0 million.

Reuters contributed to this article.

Look out below: Time Warner expects to record a $25.0 billion charge during the fourth-quarter.

On Wednesday the New York-based media conglomerate said an impairment charge for its cable, publishing and AOL units would result in a fourth-quarter operating loss. The firm, which owns CNN, Time magazine and the Warner Brothers film studio, also cut its full-year outlook to between $1.04 and $1.07 per share.

Time Warner also said that its results, particularly for its AOL and publishing unit's advertising operations, had been pressured by economic conditions that were more difficult than initially anticipated.

The market didn't take the news well, pushing Time Warner's shares down 6.2%, or 68 cents, to $10.31, in early-morning trading.

The rest of the broadcasting sector got the message, though it fared little better: CBS (nyse: CBS - news - people ) dropped 4.7%, News Corp. (nyse: NWS - news - people ) fell 5.0%, Walt Disney (nyse: DIS - news - people ) slipped 3.7% and Viacom (nyse: VIA - news - people ) tumbled 5.2%.

Also on Tuesday, Time Warner's (nyse: TWX - news - people ) cable-television arm Time Warner Cable (nyse: TWC - news - people ), said it expected to record a $15.0 billion non-cash impairment charge on its cable franchise rights in the fourth quarter, resulting in a loss for 2008.

Time Warner Cable, the nation's second largest cable television operator, added that it foresaw an impairment charge of approximately $350.0 million on its investment in wireless broadband provider, Clearwire (nasdaq: CLWR - news - people ).

The company is likely to announce new partners for its Gobi broadband technology.

The payroll processor reported 693,000 jobs lost in the U.S. private sector during the month, 223,000 more than forecast.

Steve Jobs' absence was not the only disappointment.

Bill Gross: Government bonds happen to be the one asset that people want to own during a deleveraging cycle. They weren't leveraged up by hedge funds and mom and pop investors. We were busy buying homes and stocks and risky assets…

…Now we're deleveraging, and [almost] all assets are going down in price. This is staggering.

How much deleveraging is left?

I think we're 75% of the way through. The question is, "What's the size of the government checkbook and can it match deleveraging in the financial sector?" We think the checkbook is substantial, and sometime in 2009 assets will stop going down.

Apple Inc. is cutting the price of some songs in its market-leading iTunes online store to as little as 69 cents and plans to make every track available without copy protection.

In Apple (nasdaq: AAPL - news - people )'s final appearance at the Macworld trade show, Apple's top marketing executive, Philip Schiller, said Tuesday that iTunes song prices will come in three tiers: 69 cents, 99 cents and $1.29. Record companies will choose the prices, which marks a significant change, since Apple previously made all songs sell for 99 cents.

Apple gave the record labels that flexibility on pricing as it got them to agree to sell all songs free of "digital rights management," or DRM, technology that limits people's ability to copy songs or move them to multiple computers. Apple had been offering a limited selection of songs without DRM, but by the end of this quarter, the company said, all 10 million songs in its library will be available that way.

While iTunes is the most popular digital music store, others have been faster to offer more songs without copy protection. Amazon.com Inc. (nasdaq: AMZN - news - people ) started selling DRM-free music downloads in 2007 and swayed all the major labels to sign on in less than a year.

Schiller also announced that iPhone 3G users will be able to buy songs from the iTunes store using the cellular data network. Previously, iPhone users could shop for tunes when connected to a Wi-Fi hot spot.

The iTunes changes marked the highlights of Schiller's run as a stand-in for CEO Steve Jobs, who used to make Macworld the site for some of Apple's biggest product unveilings, such as the iPhone. Apple said last month that Jobs would not address the throngs this time because the company plans to pull out of Macworld next year.

Apple shares slipped $1.18, 1.3 percent, to $93.40 in afternoon trading.

Schiller got a warm welcome from the attendees - who packed the convention hall despite the pall cast over the industry by the economic downturn - especially at the start of his talk, when he thanked them for showing up despite Jobs' notable absence. He ran seamlessly through his 90-minute presentation, getting applause and oohs from the audience, varying little from the format of slides and demos established by Jobs. And like Jobs, he gushed about Apple's products being the best in the world.

Electronics chain Best Buy Inc. said Tuesday it will offer refurbished iPhone 3Gs at a steep discount.

The phones, made by Apple Inc., start at $149 for the 8-gigabyte version and $249 for 16 gigabytes, compared with $199 and $299, respectively, for new iPhones sold at Best Buy Mobile stores. A two-year service contract with AT&T Inc. is required.

The refurbished phones will be available at 350 locations initially, then at all U.S. locations offering AT&T by the end of January, the consumer electronics chain said. The phones have been returned by customers during the 30-day trial period and restored to "like-new" condition, Best Buy said.

The iPhone 3G connects to cellular providers' speedier third-generation networks and delivers faster Web surfing and online video than the original model.

For Apple, the announcement marks another step away from tightly controlling retail sales of its products. Best Buy was the first independent retailer to sell iPhones. And Wal-Mart Stores Inc. said last month it would also sell the iPhone with a $2 mark down.

Best Buy shares jumped 94 cents, or 3 percent, 30.94 in midday trading.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

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