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Team Presentation: Satyam Scandal

The presentation summarizes the Satyam scandal, one of the largest corporate scandals in India. [1] B. Ramalinga Raju, founder and former chairman of Satyam Computer Services, confessed to falsifying the company's accounts. [2] An investigation found that Raju had inflated cash balances, understated liabilities, and overstated income to the tune of $1 billion. [3] The scandal severely damaged investor confidence in Indian corporations and led to reforms in auditing and corporate governance regulations.

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nitin garg
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47 views

Team Presentation: Satyam Scandal

The presentation summarizes the Satyam scandal, one of the largest corporate scandals in India. [1] B. Ramalinga Raju, founder and former chairman of Satyam Computer Services, confessed to falsifying the company's accounts. [2] An investigation found that Raju had inflated cash balances, understated liabilities, and overstated income to the tune of $1 billion. [3] The scandal severely damaged investor confidence in Indian corporations and led to reforms in auditing and corporate governance regulations.

Uploaded by

nitin garg
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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TEAM PRESENTATION

Team Presentation
On ON
Satyam Scandal Truth
Satyam Scandal
Presented By:
Durgesh Tiwari
Nitin Garg
Surendra Kumar

SATYAM
89

SATYAM - THE
UNSEEN TRUTH
Do You Know Him?
B RAMALINGA RAJU
FOUNDER AND FORMER
CHAIRMAN OF ONE OF THE
BIGGEST IT COMPANYOF OUR
NATION “SATYAM
COMPUTERS”
…………………………
Journey Begins
…..
He did his MBA from Ohio University, USA. trip
to the US for his education changed his destiny

Back to India in 1977 and initially developed a


textile industry named Sri Satyam.

Then he ventured into real estate business under


the name Satyam Constructions
SATYAM COMPUTERS

Satyam Computer Services Ltd was founded in 1987 by B.Ramalinga


Raju.
Head Office in Hyderabad.
It specializes in customized IT solutions for industries in the areas of
Manufacturing, Financial services, Insurance……etc.
Fourth largest it outsourcing company of India.
Employees more than 50,000 people in India
Satyam's network covers 67 countries across six continents.
Satyam provides services to more than 550 MNC’s .
Magic That Changed His Life

 On 24th June,1987 company was incorporated as


SATYAM Private Limited Co by B Rama Raju
and B.Ramalinga Raju

 On 26th August, 1991 it was converted into a


Public Limited Company.

 
1992

The Company went in for a Public Issue of Equity


shares.

The company has created infrastructure facilities at


Secunderabad, Hyderabad and Bangalore.

Installation of 64 kbit/s satellite link, which provides


the way for online access to global clients.

The launch of Satyam Infoway (Sify) .Satyam became


one of the first to enter Indian internet service market.
ACHIEVEMENTS
 March 1995 – First ISO 9001:2000 Company in the
world as certified by BVQI (Bureau Veritas Quality
International)

 19th Oct,1999 - Satyam Infoway becomes the first Indian


Internet company to be listed on NASDAQ.

 17th Sep,1999 - Satyam Chairman B. Ramalinga Raju


receives Ernst & Young Entrepreneurship (Services)
Award

 22nd Dec,2000 - Satyam Chairman Ramalinga Raju


named "IT Man of the Year" by Dataquest

 15th May, 2001 - Satyam listed on New York Stock


Exchange
SATYAM SNAPSHOT

27th Sep, 2002 - Satyam wins Golden Peacock Award


for Excellence in Corporate Governance.

11th Oct, 2002 –Wins CNBC's Asian Business


Leader Corporate Citizen of the Year Award.

In 2003 - Satyam Computer Services honoured with


prestigious IBM Lotus Award.

21s July,2005 - Satyam acquired Singapore-based


Knowledge Dynamics.
In 2006

Achieved global certification


 ISO 9001 (Quality management),
 ISO 20000 (Information technology service management
for Infrastructure Management Services and Network &
Systems),
 ISO 27001(Information Security Management standards)
 First organization in the India to launch Customer-Oriented
Global Organization training

Satyam’s revenue crosses U.S $1.4 billion & joined the


Billion Dollar Club as it's youngest Indian member
THE GOLD OF GOLDEN PEACOCK ROBBED

In September 2008, Satyam


Computer Services had received
Golden Peacock Global Award .

3 months later

JAIL IS THE
ONLY
REWARD
Satyam
Scam
B.R.Raju’s confession

“ it was like riding a tiger, not


knowing how to get off
without being eaten”
Black faces of India It

Ramalinga Raju Dinesh Dalmia (vice Chairmen)

(Satayam) (DSQ Software)


Satyam Scandal

The Satyam Computer Services scandal was publicly


announced on 7 January 2009, when Chairman
Ramalinga Raju confessed that Satyam's accounts had
been falsified. In addition to other controversies
involving Satyam, on January 7, 2009, Chairman Raju
resigned after publicly announcing his involvement in
an accounting fraud. Ramalinga Raju is currently in a
Hyderabad prison along with his brother and former
board member Rama Raju, and the former CFO
Vadlamani
REASONS
Raju wanted to take over his MAYTAS INFRA and
MAYTAS PROPERTIES.(company of their sons).
He was blamed tht he was using the funds of the
investers for the family business.
World bank had banned the satyam to take any
services for 8 years (due to illegal profit and lack of
essential document).
ACCOUNTIND SCANDAL OF 2009
Fabricated income statement

“creative account practice”

Actual Reported Difference


Particular
Cash & bank balance
321 5,361 5040
Accrued interest on bank Fd
Nil 376.5 376
Understated liability
1230 Nil 1230
Overstated Debtor
2126 2651 490
Total
- - 7,136
Revenue
2,112 2,700 588
Operating Profit
61 649 588
What is Fraud

Rs 1230 (cr) Rs
5,040+376+470(cr)
7136 (cr)

Overstated cash Understated Liabilities Fraud Amount


Balances,income
receivables
• So what were the auditors,
• There was no cash with in the company's banks
and yet the auditors went ahead and signed on
the balance sheets saying that the money was
there.
• Not just the cash, even they even signed off on
the non-existent interest that accrued on the
non-existent cash balance!
• The company officials said they relied on data
from the reputed auditors.
IMPACT
OF
SATYAM
IMPACT
Impact on India

It is surely going to be more difficult for other Indian


IT service players to win business.

Undoubtedly, this is going to hurt the prospects of


foreign money flowing into India.

 Global perception about indian companies.


Impact on stock market

It is biggest fraud in stock market.

Sensex 7 % decline on 7th January 2009

BSE
Share price of satyam

 before 7th jan 2009 it cost was 500Rs per share

After 7th jan it cost is 59.5Rs per share

Now it cost is 100Rs per share


Satyam market share
Recent likely changes in policies and Regulations

 SEBI announced special norms for takeover of


distressed companies.
 The ICAI is favoring 3 year rotation of auditors.
 ICAI to seek information from the CA concerned
and not from the firm in case of anomalies.
 ICAI is planning to set up a rating system for
Corporate Governance.
New vice chairmen & managing director

Anand Mahindra
Vice Chairmen
Mahindra Satyam
Board Members

C.P. Gurnani
Vineet Nayyar
C. Achuthan
 T.N. Manoharan
Sanjay Kalra
ULHAS N. YARGOP
Tech Mehindra wins bid for satyam scam
Tech Mahindra is paying Rs1757 crore
for a 31% stake in the company, or Rs 58per share.
 Satyam Computer Services has now zoomed 15% to Rs
54.20 ahead of the announcement of the highest bidder for
the company on April 13,2000
SATYAM TO MAHINDRA SATYAM

 MahindraSatyam.
 Type : Public
 BSE:500376
 NYSE: SAY ADR
Founded : 1987 
Headquarters: : Hyderabad, India
Key people: : Vineet Nayyar (Chairman)
C.P. Gurnani (CEO) A. S. Murty (CTO)
Industry : IT Services
IT consulting
Software services
Owner(s) : Mahindra Group
Website : MahindraSatyam.net
CONCLUSION

•Satyam bifurcating the word, we may interpret one


who had stolen & transferred your all money stolen
& trans ferred your all money in its own kitty. Let
this be the lesson for all the investors & the whole
economy.
•We also wish that the company stands once again
whooping investors not with the false promises but
in accordance with its name that is
TRUTHFULNESS.
Raju raju set up on the wall
Raju raju had great fall
Balance sheet died
Share holders cried
Raju raju made a fraud

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