Chairman Ramalinga Raju apologised and said "the gap in the balance sheet has arisen purely on account of inflated profits" during several years.
He said he was subjecting himself to the laws of the land and would "face the consequences".
India´s benchmark index fell nearly 4% on the news, as Satyam stock shed 60%.
In a letter to the board of directors, Raju said that neither he nor the managing director took any money from the company and did not benefit in financial terms following the "inflated results".
According to BBC, analysts see this as one of the worst crises to have hit corporate India, at a time when it was hoping to attract foreign investors looking for quick gains in emerging markets.
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