Case analysis

Of
“Satyam computer Services Ltd.”

Presented by
Rahul Mukherjee
Chinmoy Pati
 Story Behind Satyam Scam

• Satyam episode - individual greed, celebration of profit

making, belief in the markets and regulatory failure.
• Founder promoter of Satyam,Mr. Ramalinga Raju, resigned as
the company’s Chairman on January 7th 2009.
• He stated that roughly 1.5 Billion US $ firm’s fund are non-
existing.
• Shown a profit of 25% instead of actual profit of 3%.
• He tried to fill the gap of 1.5 Billion US $ .
 Who is responsible?

• Independent Director

• Auditor

• Security and Exchange Board of India (SEBI).

 Role of Independent Directors

• Independent Directors - director’s

remuneration and no other relation.
• Maytas Deal was having six independent
directors.
• Any of the independent directors should be a
member of audit committee.
• Due to this scam they are still independent.
 Duties of An Auditor

• Must be Chartered Accountant.

• He should be fair.

• Requires some statutory duties.

• A case of fault of auditors as on Satyam scam.

 SEBI as a regulatory

• Bridge between investors and stock exchange.

• Information regarding listed companies.

• Power to issue directions and investigate.

• Fault of SEBI as on Satyam Case.

 Conclusion

• The Satyam Scam can be avoided :

 If auditor firm is honest.

 If SEBI plays an active role.

 Review legal compliance report periodically by

independent directors.