The Great Indian Scam

CASIRJ Volume 6 Issue 7 [Year - 2015] ISSN 2319 – 9202
THE GREAT INDIAN SCAM
Dr. Raj Nangia

Associate Professor
Lakshmibai College
(University of Delhi)
INTRODUCTION
‗India needs to deal with the malice of corruption and improve governance in Asia's third-largest
economy." Prime Minister Manmohan Singh said on March 18, 2011.‘
A fraudulent scheme performed by a dishonest individual, group, or company in an attempt
obtain money or something else of value
Fraud and corruption in companies is a serious problem all over the world ever since the
corporate have been attempting to roseate the picture of their performance reported to public.
Companies are constantly identifying new and ingenious ways to defraud their customers,
investors, the government and others. This has attracted attention in India too; after the various
scams like: Harshad Mehta Scam, Satyam scam, Sugar Import Scam Preferential Allotment
Scam ,Yugoslav Dinar scam, Meghalaya Forest Scam , Fertilizers Import Scam ,Sukhram
telecom Scam , Lavalin Power project Scam , Bihar Land Scam and so on.
For this reason it is important for stakeholders with an interest in a company to devise ways of
detecting and identifying fraud to protect their interests. Managers are primarily responsible for
the prevention and detection of financial statement fraud. However, they may be the primary
perpetrators of fraud. The responsibility to detect and identify financial statement fraud should
also not rest solely with the auditors, as they cannot be expected to provide absolute assurance
that all material misstatements are detected and identified.
This article contains a detailed analysis of The Great Indian Scams. The results are surprising ,
considerable remains for improvement notably, India must reform as to how its boards of
directors function, improve its enforcement mechanism, redefine its corporate laws.
HISTORY
• In 2010 India was ranked 87th out of 178th countries in Transparency

International's Corruption Perceptions Index. From 1948 through 2008 India lost a total
of $213 billion in illicit financial flows (or illegal capital flight). These illicit financial
flows were generally the product of: corruption, bribery and kickbacks, criminal
activities, and efforts to shelter wealth from a country's tax authorities.
International Research Journal of Commerce Arts and Science

http://www.casirj.com Page 160
• According to the data provided by the Swiss Banking Association Report (2006), India
has more black money than the rest of the world combined.
SCAMS IN INDIA
Following is the list of scams in India since independence:
• Jeep Purchase(1948)
• Cycle Imports(1951)
• Mundhra Scandal(1957)
• Teja loans scam(1960)
• Kairon scam(1963)
• Patnaik‘s own goal(1965)
• Maruti Scandal(1974)
• Bofors pay-off(1987)
• Air bus Scandal(1990)
AFTER 1991:
1992 — Harshad Mehta Scam was worth Rs 5000 Crores.

1994 — Sugar Import Scam was worth Rs 650 Crores.
1995 — Preferential Allotment Scam was worth Rs 5000 Crores.
1997 — C R Bhansali stock scam was worth Rs 1200 Crores.
2001 — Ketan Parekh security scam was worth Rs 1250 Crores.
2008 – Satyam Scam was worth Rs14000Crores.
2008 — 2G Spectrum Scam was worth Rs 1.76 lakh Crores.
2010 — Commonwealth Games loot was worth 70,000 crores
2012—Uttar Pradesh NHRM Scam was worth 10,000 crores
2012—Indian coal allocation scam was worth 185,591 crores
2013—Saradha financial group scandal was worth 10,000 crores
2014—Delhi Jal Board Scam was worth 10,000 crores
THE GREAT INDIAN
SCAM: Scam is an act of obtaining money by means of deception including fake personalities,
fake photos, fake template letters, non-existent addresses and phone numbers, forged documents.
1. Harshad Mehta Scam,1992
2. Satyam Scam,2008
3. 2G Spectrum scam,2008

4. Commonwealth Games Scam,2010
Harshad Mehta Scam (1992)

Harshad M Mehta was an Indian stockbroker, well known for his wealth and for having been
charged with numerous financial crimes that took place in 1992. It was alleged that Mehta
engaged in a massive stock manipulation scheme financed by worthless bank receipts, which his
firm brokered in "ready forward" transactions between banks. Mehta was convicted by the
Bombay High Court and Supreme Court of India for his part in a financial scandal valued at
49.99 billion (US$ 810 million) which took place on the Bombay Stock Exchange (BSE). The
scandal exposed the loopholes in the Bombay Stock Exchange (BSE) transaction system and
SEBI further introduced new rules to cover those loopholes.
By 1990 Harshad Mehta had risen to prominence in the stock market. He had been buying shares
heavily. The shares which attracted his attention were:
1. Associated Cement Co. (ACC),
2. Apollo Tyres,
3. Reliance,
4. Tata Iron and Steel Co. (TISCO ),
5. BPL,
6. Sterlite,
7. Videocon.
Exploiting several loopholes in the banking system, Mehta and his associates siphoned off funds
from inter-bank transactions and bought shares heavily at a premium across many segments,
triggering a rise in the Sensex. When the scheme was exposed, banks started demanding their
money back, causing the collapse.
He was later charged with 72 criminal offenses ,and more than 600 civil action suits were
filed against him.He was arrested and banished from the stock market Mehta and his
brothers were arrested by the CBI on November 9,1992 for allegedly mis appropriating more
than 27 lakhs shares of about 90 companies.
Conclusion :
Harshad Mehta was brave stock broker . He knew the loopholes I banking system as well as how
to exploit that loopholes . His whole intention to do this was to rise in SENSEX.
SATYAM SCAM(2008)
BACKGROUND
On 24th June 1987, Satyam Computer Services Ltd (Popularly known as Satyam) was
incorporated by the two brothers, B Rama Raju and B Ramalinga Raju1, as a private limited
company with just 20 employees for providing software development and consultancy services
to large corporations (the company got converted into public in 1991). During the year 1996,
company promoted four subsidiaries including Satyam Renaissance Consulting Ltd, Satyam
Enterprise Solutions Pvt. Ltd., and Satyam Infoway Pvt. Ltd. Satyam Computer Services Ltd in
1997 was selected by the Switzerland-based World Economic Forum and World Link Magazine
as one of India's most remarkable and rapidly growing entrepreneurial companies.
Problems in Satyam begin when on December the 16th, 2008; its chairman Mr Ramalinga Raju,
in a surprise move announced a $1.6 billion bid for two Maytas companies i.e. Maytas
Infrastructure Ltd and Maytas Properties Ltd saying he wanted to deploy the cash available for
the benefit of investors. The two companies have been promoted and controlled by Raju‘s
family. The thumbs down given by investors and the market forced him to retreat within 12
hours. Share prices plunges by 55% on concerns about Satyam‘s corporate governance. In a
surprise move, the World Bank announced on December 23, 2008 that Satyam has been barred
from business with World Bank for eight years for providing Bank staff with ―improper benefits‖
and charged with data theft and bribing the staff. Share prices fell another 14% to the lowest in
over 4 years. The lone independent director since 1991, US academician Mangalam Srinivasan,
announced resignation followed by the resignation of three more independent directors on
December 28 i.e. Vinod K Dham (famously known as father of the Pentium and an ex Intel
employee), M Rammohan Rao (Dean of the renowned Indian School of Business) and Krishna
Palepu (professor at Harvard Business School). At last, on January 7, 2009, B. Ramalinga Raju
announced confession of over Rs. 7800 crore financial fraud and he resigned as chairman of
Satyam. He revealed in his letter that his attempt to buy Maytas companies was his last attempt
to ―fill fictitious assets with real ones‖. He admitted in his letter, ―It was like riding a tiger
without knowing how to get off without being eaten‖. Satyam‘s promoters, two brothers B
Ramalinga Raju and B Rama Raju were arrested by the State of Andhra Pradesh police and the
Central government took control of the tainted company. The Raju brothers were booked for
criminal breach of trust, cheating, criminal conspiracy and forgery under the Indian Penal Code.
The Central Government reconstituted Satyam's board that included three-members, HDFC
Chairman Deepak Parekh, Ex Nasscom chairman and IT expert Kiran Karnik and former SEBI
member C Achuthan. The Central Government added three more directors to the reconstituted

Board i.e., CII chief mentor Tarun Das, former president of the Institute for Chartered
Accountants (ICAI) TN
Manoharan and LIC's S Balakrishnan.
A week after Satyam founder B Ramalinga Raju‘s scandalous confession, Satyam‘s auditors
Price Waterhouse finally admitted that its audit report was wrong as it was based on wrong
financial statements provided by the Satyam‘s management. On January 22, 2009, Satyam‘s
CFO Srinivas Vadlamani confessed to having inflated the number of employees by 10,000. He
told CID officials interrogating him that this helped in drawing around Rs 20 crore per month
from the related but fictitious salary accounts. Andhra Pradesh State CB-CID raided the house of
Suryanarayana Raju, the youngest sibling of Ramalinga Raju who owned 4.3 per cent in Maytas
Infra, and recovered 112 sale deeds of different land purchases and development agreements.
Senior partners S Gopalakrishnan and Srinivas Talluri of the auditing firm Pricewater house
Coopers (PwC) were arrested for their alleged role in the Satyam scandal. The State‘s CID police
booked them, on charges of fraud (Section 420 of the IPC) and criminal conspiracy (120B).
On January 7, Ramalinga Raju emailed his resignation to market regulator SEBI admitting to
financial irregularities, which, in less than two hours, was forwarded to the Ministry of Corporate
Affairs (MCA). The same day, the Ministry asked its two wings the Institute of Chartered
Accountants of India (ICAI) and the Institute of Company Secretaries of India (ICSI) to inquire
into the role of auditors and company secretaries for swift regulatory action. There was an
emergency inter-ministerial meeting next day ie on 8th although it was a government holiday.
Concurrently, the Ministry was drafting the petition to be filed before the Company Law Board
(CLB)16. The very next day, the Ministry got the CLB order superseding the Satyam board with
government appointed directors. SEBI relaxed the take-over code per se on an application by the
Satyam board to meet the emergency like Satyam where government suspended the board of a
company and appointed directors who act for the public good without any payment or
compensation. Clearly, the Ministry of Corporate Affairs (MCA) acted swiftly and thoughtfully
and saw the issue as much larger than that of an individual company. Satyam could not have
been saved if there was any delay in decision making at the government level. Investigations also
progressed as swiftly as the process of rescuing Satyam. A Satyam like situation in the US would
not have allowed the government to act on behalf of the shareholders and appeal to the judicial
authority concerned. The Mahindra Group, the new owner of Satyam and the largest shareholder
in Tech Mahindra, is set to merge the two companies to transform the combined entity into an
Information and Communication Technology (ICT).
COURT’S REACTION TOWARDS SATYAM SCAM :
A local court on Monday convicted Satyam founder B Ramalinga Raju, accused of one of the
most sensational corporate frauds in the country, and other accused in connection with
complaints filed by Serious Fraud Investigation Office (SFIO).
The court sentenced Raju and others to six months' jail term and imposed fines on all the
accused. SFIO, the investigation arm of Union corporate affairs ministry, had filed seven
complaints against the erstwhile Satyam Computer Services Limited (SCSL) and its directors for
violations of the Companies Act in the Special Court for Economic Offences in December 2009.
Raju and some of the directors were sentenced to six months' imprisonment and each of them
were fined an amount ranging from Rs 10,000 to Rs 10 lakh, while in other complaints only fines
were imposed.
The court directed one of the former directors, Krishna G Palepu, to pay fine of a whopping Rs
2.66 crore in complaint number 394/2009 within two months.
"Out of the seven complaints, the accused including Raju and some others were convicted in six
complaints with jail terms and fines while in one complaint where the offence is punishable with
fine, they were granted acquittal. The sentences will run concurrently,"special prosecutor C
Raghu said. Raju is currently out on bail. Monday's court order was suspended to enable the
accused file appeals. Raju, former Satyam managing director Rama Raju, and its former chief
financial officer Vadlamani Srinivas and former director Ram Mynampati were given jail terms
and fines.
Other former Satyam directors including Krishna G Palepu, Manglam Srinivas, Vinod K Dham,
former cabinet secretary T R Prasad, ex-director of IIT Prof V S Raju and former dean of ISB
Prof Ram Mohan Rao were fined Rs 20,000 each.
SCSL, named in two of the complaints, had paid the compounding fee and thus those offences
were compounded by the Company Law Board, special prosecutor Raghu said.
Satyam's company secretary G Jayaraman had also paid the compounding fee.
The SFIO had charged the accused with fudging of balance sheets, deceiving shareholders,
taking huge benefits and dividends as directors, and showing unpaid dividends as paid.
The defence lawyers filed a petition seeking suspension of the court order, which was allowed,
enabling them to file an appeal within 30 days.
Meanwhile, the CBI court is likely to pronounce its verdict on December 23 in the
Case related to accounting fraud at Satyam.
Touted as the country's biggest accounting fraud, the scam came to light on January 7, 2009,
after Ramalinga Raju confessed to manipulating company's account books.
Following are the common governance problems, which have been noticed in the collapse of
Satyam:
1.UNETHICAL CONDUCT –
In Satyam‘s case, for its founder B.Ramalinga Raju, honesty was not something that he wanted
to pursue as hard as profits. He wanted to make money any which way by avoiding paying taxes,
cooking books, and pay offs. Ironically, the word ‗Satyam‘ means ‗truth‘ in Sanskrit language,
but Raju‘s admission accompanied by his resignation shows the company had been feeding
investors, shareholders, clients and employees a steady diet of ‗asatyam‘ (or untruth), at least on
its financial front. Did Satyam‘s Boss B. Ramalinga Raju while leading the company followed
the spirit behind its name, certainly not? He on January 7, 2009 revealed some alarming truths
that he was concealing for a long period by confessing to a fraud of Rs 7800 crores ($1.47
billion) on Satyam‘s balance sheet. He and his brother B. Rama Raju who was Satyam‘s
managing director, had disguised all this from the company‘s board, senior managers and
auditors for several years. The unfolding of the story behind the confession reveals the fraudulent
and unethical character of a man who till very recently bagged number of awards on good
corporate governance. There was no explicit or implicit code of ethics surrounding Satyam‘s
corporate culture; bribery, corruption, and exchange of favors, within and outside the company,
appear to have occurred with frequency at various levels. It was too late when World Bank in the
3rd week of December, 2008 publicized Satyam‘s unethical work culture by announcing Satyam
being imposed with charges of data theft and bribing the staff and was barred from business with
World Bank for eight years for providing Bank staff with ―improper benefits‖. Ethical standards
thus in the company were poor
Both the CEO and CFO have been charged putting self-interests ahead of the company's
interests. They were actively selling large portions of their shareholdings in the company a few
months before the confession of scandalous fraud. The company‘s most senior executives
behaved unethically and there was no evidence of basic moral conduct or behavior at the top
executives‘ level that exploited the company's resources for personal gain for several years. The
internal controls appear not to have detected the fraudulent activities for an extended period of
time. Satyam received the World Council for Corporate Governance‘s Golden Peacock Award
for excellence in corporate governance, indeed; there is a strong case for World Council for
Corporate Governance to assess its own methodology in selecting the winner for their awards.
Withdrawing the 2002 award today after the blunder has been done does not protect the
Council‘s reputation..
2.A CASE OF INSIDER TRADING –
Investigations into Satyam scam by the Crime Investigation Department (CID) of the State
Police and Central agencies have established that the promoters indulged in nastiest kind of
insider trading of the company‘s shares to raise money for building a large land bank. The funds
collected by the former chairman B. Ramalinga Raju, his brother Rama Raju and their relatives
were used to purchase lands in the names of 330 companies and about 30 individuals. All of
them had equity participation in these entities, of which 327 were linked to the family. They have
been charged to use money earned by offloading their shares in Satyam to purchase lands.
According to the SFIO findings, promoters of Satyam and their family members during April
2000 to January 7, 2009 sold almost 3.9 crore shares collecting in Rs 3029.67 crore . The
promoters on the basis of the inflated books posed a healthy financial state of the company in the
market. As the brand built strong amongst the peers, the share price started shooting up. During
this course of time, the promoters kept their objective straight of offloading their shares at
frequent intervals. Thus, the promoters not only manipulated share prices to make personal gains
but also cheated the other shareholders and investors. SFIO report also states how the promoters
during this time traded through 15 brokers, sub-brokers and investment companies in the market,
some considered market leaders, namely, the DBS Cholamandalam Securities Ltd, DSP Merrill
Lynch Ltd and BNP Paribas equity India Pvt Ltd.During this course, the founder ex-chairman
Ramalinga Raju sold 98 lakh shares collecting in Rs 773.42 crores, whereas, his brother Rama
Raju, sold 1.1 crore shares pocketing Rs 894.32 crores.
2. FALSE BOOKS AND BOGUS ACCOUNTING –
According to the findings of SFIO, Satyam‘s balance sheet as on September 7, 2008 carried an
accrued interest of Rs. 376 crore, which was non-existent. These figures of accrued interest were
shown in balance sheets in order to suppress the detection of such non-existent fixed deposits on
account of inflated profits. The investigations also detailed that the company had deliberately

paid taxes of about 186.91 crores on account of the non-existent accrued interests of Rs 376
crores, which was a considerable loss for the company.
4.UNCONVINCED ROLE OF INDEPENDENT DIRECTORS –
The Satyam episode has brought out the failure of the present corporate governance structure that
hinges on the independent directors, who are supposed to bring objectivity to the oversight
function of the board and improve its effectiveness. They serve as watchdogs over management,
which involves keeping their eyes and ears open at Board deliberations with critical eye raising
queries when decisions scent wrong. Stakeholders place high expectations on them but the
Satyam‘s case reveals such expectations are misplaced. Six of the nine directors on Satyam‘s
Board were independent directors including US academician Mangalam Srinivasan (the
independent director since 1991), Vinod K. Dham (famously known as father of the Pentium and
an ex Intel employee), M Rammohan Rao (Dean of Indian School of Business), US Raju (former
director of IIT Delhi), T.R. Prasad (former Cabinet Secretary) and Krishna Palepu (professor at
Harvard Business School). They were men of standing & reputation. What concerns everyone is
that those independent directors allowed themselves to be party to the mysterious designs of the
promoter directors. It is hard to believe that such eminent and experienced personalities could
not discover the well-planned massive fraud and manipulations. The independent directors
should have questioned why the company was sitting on such a huge pile of cash (as shown in
the cooked books). The facts of the Satyam‘s case make it clear in spite of knowing the truth
they did not raise their voice against such malpractices. They kept watching the wrongdoing for
so many years even when it was detrimental to the interest of shareholders and other
stakeholders. They although met the standards set by the NYSE54 (on which Satyam‘s securities
were listed) and Clause 49 of SEBI, but they did not ask hard questions.
5.QUESTIONABLE ROLE OF AUDIT COMMITTEE –
The audit committee failed to ensured transparency in the company, as well as failure of internal
control system within the organization The timely action on the information supplied by a
whistleblower to the chairman and members of the audit committee (an e-mail dated December
18, 2008 by Jose Abraham), could serve as an SOS to the company, but, they chose to keep silent
and did not report the matter to the shareholders or the regulatory authorities.
POLICY ACTIONS:
Some of the steps which could be taken to strengthen corporate governance are: have in all listed
companies a code on ethics; independent regulatory body on the lines of the Public Company
Accounting Oversight Board (PCAOB) of USA; rotation of external auditors in non-financial
institutions; Reform Audit Education; split offices of chairman and CEO; encourage competent
directors; abolish practice of nominating independent directors, exempt independent directors
from vicarious liability; provide insurance cover to them; review the definition of independent
director given in clause 49 of listing agreement; close supervision of rating agencies; superior
Board practices, improve remuneration policy; legislative sanction to insider trading laws;
introduce new audit standards; make audit committee strictly independent; prohibit political
funding; install whistleblower system; introduce class action suit & compensation; make CSR
compliance a mandatory provision; have in place permanent PPP system, and enhance criminal
and civil penalties.
CONCLUSION :
The Satyam fraud has shattered the dreams of different categories of investors, shocked the
government and regulators alike and led to questioning the accounting practices of statutory
auditors and corporate governance norms in India. Severe corporate governance problems
emerge out of the above-mentioned corporate wreckage. Many of these governance problems
were noticed in several other such corporate failures in USA, UK and Europe. These countries
reacted strongly to the corporate failures and codes & standards on corporate governance came to
the centre stage. Corporate scandals especially in the United States triggered reforms in corporate
governance, accounting practices and disclosures the world over. Enron debacle in 2001 and
number of other scandals involving large US companies around that period set in motion the
corporate governance reform process and resulted in the passing of the Sarbanes-Oxley Act,
2002. The main objective of the Oxley Act is to repose investor‘s confidence by preventing
corporate frauds and ensuring transparency and disclosures. Similar kinds of corporate
governance reforms are needed in India too. There is need to reform corporate governance in
India by taking harsh policy measures. Even though corporate governance mechanisms cannot
prevent unethical activity by top management completely, but they can at least act as a means of
detecting such activity before it is too late. When an apple is rotten there is no cure, but at least
the rotten apple can be removed before the infection spreads and infects the whole basket. This is
really what effective governance is about.
several loopholes in the banking system, Mehta and his associates siphoned off funds from inter-
bank transactions and bought shares heavily at a premium across many segments, triggering a
rise in the Sensex. When the scheme was exposed, banks started demanding their money back,
causing the collapse.
Conclusion :
Harshad Mehta was brave stock broker . He knew the loopholes I banking system as well as how
to exploit that loopholes . His whole intention to do this was to rise in SENSEX.
SATYAM SCAM(2008)
BACKGROUND
On 24th June 1987, Satyam Computer Services Ltd (Popularly known as Satyam) was
incorporated by the two brothers, B Rama Raju and B Ramalinga Raju1, as a private limited
company with just 20 employees for providing software development and consultancy services
to large corporations (the company got converted into public in 1991). During the year 1996,
company promoted four subsidiaries including Satyam Renaissance Consulting Ltd, Satyam
Enterprise Solutions Pvt. Ltd., and Satyam Infoway Pvt. Ltd. Satyam Computer Services Ltd in
1997 was selected by the Switzerland-based World Economic Forum and World Link Magazine
as one of India's most remarkable and rapidly growing entrepreneurial companies.
Problems in Satyam begin when on December the 16th, 2008; its chairman Mr Ramalinga Raju,
in a surprise move announced a $1.6 billion bid for two Maytas companies i.e. Maytas

Infrastructure Ltd and Maytas Properties Ltd saying he wanted to deploy the cash available for
the benefit of investors. The two companies have been promoted and controlled by Raju‘s
family. The thumbs down given by investors and the market forced him to retreat within 12
hours. Share prices plunges by 55% on concerns about Satyam‘s corporate governance. In a
surprise move, the World Bank announced on December 23, 2008 that Satyam has been barred
from business with World Bank for eight years for providing Bank staff with ―improper benefits‖
and charged with data theft and bribing the staff. Share prices fell another 14% to the lowest in
over 4 years. The lone independent director since 1991, US academician Mangalam Srinivasan,
announced resignation followed by the resignation of three more independent directors on
December 28 i.e. Vinod K Dham (famously known as father of the Pentium and an ex Intel
employee), M Rammohan Rao (Dean of the renowned Indian School of Business) and Krishna
Palepu (professor at Harvard Business School). At last, on January 7, 2009, B. Ramalinga Raju
announced confession of over Rs. 7800 crore financial fraud and he resigned as chairman of
Satyam. He revealed in his letter that his attempt to buy Maytas companies was his last attempt
to ―fill fictitious assets with real ones‖. He admitted in his letter, ―It was like riding a tiger
without knowing how to get off without being eaten‖. Satyam‘s promoters, two brothers B
Ramalinga Raju and B Rama Raju were arrested by the State of Andhra Pradesh police and the
Central government took control of the tainted company. The Raju brothers were booked for
criminal breach of trust, cheating, criminal conspiracy and forgery under the Indian Penal Code.
The Central Government reconstituted Satyam's board that included three-members, HDFC
Chairman Deepak Parekh, Ex Nasscom chairman and IT expert Kiran Karnik and former SEBI
member C Achuthan. The Central Government added three more directors to the reconstituted
Board i.e., CII chief mentor Tarun Das, former president of the Institute for Chartered
Accountants (ICAI) TN Manoharan and LIC's S Balakrishnan.
A week after Satyam founder B Ramalinga Raju‘s scandalous confession, Satyam‘s auditors
Price Waterhouse finally admitted that its audit report was wrong as it was based on wrong
financial statements provided by the Satyam‘s management. On January 22, 2009, Satyam‘s
CFO Srinivas Vadlamani confessed to having inflated the number of employees by 10,000. He
told CID officials interrogating him that this helped in drawing around Rs 20 crore per month
from the related but fictitious salary accounts. Andhra Pradesh State CB-CID raided the house of
Suryanarayana Raju, the youngest sibling of Ramalinga Raju who owned 4.3 per cent in Maytas
Infra, and recovered 112 sale deeds of different land purchases and development agreements.
Senior partners S Gopalakrishnan and Srinivas Talluri of the auditing firm Pricewater house
Coopers (PwC) were arrested for their alleged role in the Satyam scandal. The State‘s CID police
booked them, on charges of fraud (Section 420 of the IPC) and criminal conspiracy (120B).
On January 7, Ramalinga Raju emailed his resignation to market regulator SEBI admitting to
financial irregularities, which, in less than two hours, was forwarded to the Ministry of Corporate
Affairs (MCA). The same day, the Ministry asked its two wings the Institute of Chartered
Accountants of India (ICAI) and the Institute of Company Secretaries of India (ICSI) to inquire
into the role of auditors and company secretaries for swift regulatory action. There was an
emergency inter-ministerial meeting next day ie on 8th although it was a government holiday.
Concurrently, the Ministry was drafting the petition to be filed before the Company Law Board
(CLB)16. The very next day, the Ministry got the CLB order superseding the Satyam board with
government appointed directors. SEBI relaxed the take-over code per se on an application by the
Satyam board to meet the emergency like Satyam where government suspended the board of a
company and appointed directors who act for the public good without any payment or
compensation. Clearly, the Ministry of Corporate Affairs (MCA) acted swiftly and thoughtfully
and saw the issue as much larger than that of an individual company. Satyam could not have
been saved if there was any delay in decision making at the government level. Investigations also
progressed as swiftly as the process of rescuing Satyam. A Satyam like situation in the US would
not have allowed the government to act on behalf of the shareholders and appeal to the judicial
authority concerned.
The Mahindra Group, the new owner of Satyam and the largest shareholder in Tech Mahindra, is
set to merge the two companies to transform the combined entity into an Information and
Communication Technology (ICT).
COURT’S REACTION TOWARDS SATYAM SCAM :
A local court on Monday convicted Satyam founder B Ramalinga Raju, accused of one of the
most sensational corporate frauds in the country, and other accused in connection with
complaints filed by Serious Fraud Investigation Office (SFIO).
The court sentenced Raju and others to six months' jail term and imposed fines on all the
accused.
SFIO, the investigation arm of Union corporate affairs ministry, had filed seven complaints
against the erstwhile Satyam Computer Services Limited (SCSL) and its directors for violations
of the Companies Act in the Special Court for Economic Offences in December 2009.
Raju and some of the directors were sentenced to six months' imprisonment and each of them
were fined an amount ranging from Rs 10,000 to Rs 10 lakh, while in other complaints only fines
were imposed.
The court directed one of the former directors, Krishna G Palepu, to pay fine of a whopping Rs
2.66 crore in complaint number 394/2009 within two months.
"Out of the seven complaints, the accused including Raju and some others were convicted in six
complaints with jail terms and fines while in one complaint where the offence is punishable with
fine, they were granted acquittal. The sentences will run concurrently," special prosecutor C
Raghu said.
Raju is currently out on bail. Monday's court order was suspended to enable the accused file
appeals.
Raju, former Satyam managing director Rama Raju, and its former chief financial officer
Vadlamani Srinivas and former director Ram Mynampati were given jail terms and fines.
Other former Satyam directors including Krishna G Palepu, Manglam Srinivas, Vinod K Dham,
former cabinet secretary T R Prasad, ex-director of IIT Prof V S Raju and former dean of ISB
Prof Ram Mohan Rao were fined Rs 20,000 each.
SCSL, named in two of the complaints, had paid the compounding fee and thus those offences
were compounded by the Company Law Board, special prosecutor Raghu said.
Satyam's company secretary G Jayaraman had also paid the compounding fee.
The SFIO had charged the accused with fudging of balance sheets, deceiving shareholders,
taking huge benefits and dividends as directors, and showing unpaid dividends as paid.
The defence lawyers filed a petition seeking suspension of the court order, which was allowed,
enabling them to file an appeal within 30 days.
Meanwhile, the CBI court is likely to pronounce its verdict on December 23 in the

case related to accounting fraud at Satyam.

Touted as the country's biggest accounting fraud, the scam came to light on January 7, 2009,
after Ramalinga Raju confessed to manipulating company's account books.
Following are the common governance problems, which have been noticed in the collapse of
Satyam:
1.UNETHICAL CONDUCT –
In Satyam‘s case, for its founder B.Ramalinga Raju, honesty was not something that he wanted
to pursue as hard as profits. He wanted to make money any which way by avoiding paying taxes,
cooking books, and pay offs. Ironically, the word ‗Satyam‘ means ‗truth‘ in Sanskrit language,
but Raju‘s admission accompanied by his resignation shows the company had been feeding
investors, shareholders, clients and employees a steady diet of ‗asatyam‘ (or untruth), at least on
its financial front. Did Satyam‘s Boss B. Ramalinga Raju while leading the company followed
the spirit behind its name, certainly not? He on January 7, 2009 revealed some alarming truths
that he was concealing for a long period by confessing to a fraud of Rs 7800 crores ($1.47
billion) on Satyam‘s balance sheet. He and his brother B. Rama Raju who was Satyam‘s
managing director, had disguised all this from the company‘s board, senior managers and
auditors for several years. The unfolding of the story behind the confession reveals the fraudulent
and unethical character of a man who till very recently bagged number of awards on good
corporate governance. There was no explicit or implicit code of ethics surrounding Satyam‘s
corporate culture; bribery, corruption, and exchange of favors, within and outside the company,
appear to have occurred with frequency at various levels. It was too late when World Bank in the
3rd week of December, 2008 publicized Satyam‘s unethical work culture by announcing Satyam
being imposed with charges of data theft and bribing the staff and was barred from business with
World Bank for eight years for providing Bank staff with ―improper benefits‖. Ethical standards
thus in the company were poor
Both the CEO and CFO have been charged putting self-interests ahead of the company's
interests. They were actively selling large portions of their shareholdings in the company a few
months before the confession of scandalous fraud. The company‘s most senior executives
behaved unethically and there was no evidence of basic moral conduct or behavior at the top
executives‘ level that exploited the company's resources for personal gain for several years. The
internal controls appear not to have detected the fraudulent activities for an extended period of
time. Satyam received the World Council for Corporate Governance‘s Golden Peacock Award
for excellence in corporate governance, indeed; there is a strong case for World Council for
Corporate Governance to assess its own methodology in selecting the winner for their awards.
Withdrawing the 2002 award today after the blunder has been done does not protect the
Council‘s reputation..
2.A CASE OF INSIDER TRADING –
Investigations into Satyam scam by the Crime Investigation Department (CID) of the State
Police and Central agencies have established that the promoters indulged in nastiest kind of
insider trading of the company‘s shares to raise money for building a large land bank. The funds
collected by the former chairman B. Ramalinga Raju, his brother Rama Raju and their relatives
were used to purchase lands in the names of 330 companies and about 30 individuals. All of
them had equity participation in these entities, of which 327 were linked to the family. They have
been charged to use money earned by offloading their shares in Satyam to purchase lands.
According to the SFIO findings, promoters of Satyam and their family members during April
2000 to January 7, 2009 sold almost 3.9 crore shares collecting in Rs 3029.67 crore . The
promoters on the basis of the inflated books posed a healthy financial state of the company in the
market. As the brand built strong amongst the peers, the share price started shooting up. During
this course of time, the promoters kept their objective straight of offloading their shares at
frequent intervals. Thus, the promoters not only manipulated share prices to make personal gains
but also cheated the other shareholders and investors. SFIO report also states how the promoters
during this time traded through 15 brokers, sub-brokers and investment companies in the market,
some considered market leaders, namely, the DBS Cholamandalam Securities Ltd, DSP Merrill
Lynch Ltd and BNP Paribas equity India Pvt Ltd.During this course, the founder ex-chairman
Ramalinga Raju sold 98 lakh shares collecting in Rs 773.42 crores, whereas, his brother Rama
Raju, sold 1.1 crore shares pocketing Rs 894.32 crores
1. FALSE BOOKS AND BOGUS ACCOUNTING –
According to the findings of SFIO, Satyam‘s balance sheet as on September 7, 2008 carried an
accrued interest of Rs. 376 crore, which was non-existent. These figures of accrued interest were
shown in balance sheets in order to suppress the detection of such non-existent fixed deposits on
account of inflated profits. The investigations also detailed that the company had deliberately
paid taxes of about 186.91 crores on account of the non-existent accrued interests of Rs 376
crores, which was a considerable loss for the company.
4.UNCONVINCED ROLE OF INDEPENDENT DIRECTORS –
The Satyam episode has brought out the failure of the present corporate governance structure that
hinges on the independent directors, who are supposed to bring objectivity to the oversight
function of the board and improve its effectiveness. They serve as watchdogs over management,
which involves keeping their eyes and ears open at Board deliberations with critical eye raising
queries when decisions scent wrong. Stakeholders place high expectations on them but the
Satyam‘s case reveals such expectations are misplaced. Six of the nine directors on Satyam‘s
Board were independent directors including US academician Mangalam Srinivasan (the
independent director since 1991), Vinod K. Dham (famously known as father of the Pentium and
an ex Intel employee), M Rammohan Rao (Dean of Indian School of Business), US Raju (former
director of IIT Delhi), T.R. Prasad (former Cabinet Secretary) and Krishna Palepu (professor at
Harvard Business School). They were men of standing & reputation. What concerns everyone is
that those independent directors allowed themselves to be party to the mysterious designs of the
promoter directors. It is hard to believe that such eminent and experienced personalities could
not discover the well-planned massive fraud and manipulations. The independent directors
should have questioned why the company was sitting on such a huge pile of cash (as shown in
the cooked books). The facts of the Satyam‘s case make it clear in spite of knowing the truth
they did not raise their voice against such malpractices. They kept watching the wrongdoing for

so many years even when it was detrimental to the interest of shareholders and other
stakeholders. They although met the standards set by the NYSE54 (on which Satyam‘s securities
were listed) and Clause 49 of SEBI, but they did not ask hard questions.
5.QUESTIONABLE ROLE OF AUDIT COMMITTEE –
The audit committee failed to ensured transparency in the company, as well as failure of internal
control system within the organization The timely action on the information supplied by a
whistleblower to the chairman and members of the audit committee (an e-mail dated December
18, 2008 by Jose Abraham), could serve as an SOS to the company, but, they chose to keep silent
and did not report the matter to the shareholders or the regulatory authorities.
POLICY ACTIONS:
Some of the steps which could be taken to strengthen corporate governance are: have in all listed
companies a code on ethics; independent regulatory body on the lines of the Public Company
Accounting Oversight Board (PCAOB) of USA; rotation of external auditors in non-financial
institutions; Reform Audit Education; split offices of chairman and CEO; encourage competent
directors; abolish practice of nominating independent directors, exempt independent directors
from vicarious liability; provide insurance cover to them; review the definition of independent
director given in clause 49 of listing agreement; close supervision of rating agencies; superior
Board practices, improve remuneration policy; legislative sanction to insider trading laws;
introduce new audit standards; make audit committee strictly independent; prohibit political
funding; install whistleblower system; introduce class action suit & compensation; make CSR
compliance a mandatory provision; have in place permanent PPP system, and enhance criminal
and civil penalties.
CONCLUSION :
The Satyam fraud has shattered the dreams of different categories of investors, shocked the
government and regulators alike and led to questioning the accounting practices of statutory
auditors and corporate governance norms in India.
2G SPECTRUM SCAM (2008)
Spectrum is specific range of electromagnetic wavelength , which is used in radio, T.V.

broadcasting, mobile communications and internet facility. For AM540KHz, cable TV 145-860
MHz,3G 2100MHz, broad band 2300 MHz spectrums are used.
WHAT IS 2G ?
 2G is short form of second generation wireless telephone technology.

 The wavelength between 800-1900 MHz is called 2G spectrum,which is useful for
mobile communication technolongy

As it is national property, people have right over it.As people have elected their
representative,they have the power to allocate this resource.As government is divided for
administrative purposes,it is the onus of tele communication ministry to allocate to various
telecom companies and the income generated should be used for welfare of people.
India is divided into 22 telecommunications zones, with 281 zonal licenses.In 2008, 122 new
second-generation 2G Unified Access Service (UAS) licenses were granted to telecom
companies on a first-come, first-served basis at the 2001 price.
One such allocation in the 2G network spectrum took place in India in the year 2008 under the
‗able tutelage‘ of the then Telecom Minister A. Raja, which today we all identify as the 2G
spectrum scam. The scam is so magnanimous that today, the TIME magazine lists it as the 2nd
Worst Abuse of Power right next to the WaterGate Scam of the United States. According to the
CBI charge sheet, several laws were violated and bribes paid to favour certain firms in granting
2G spectrum licenses. According to a CAG audit, licenses were granted to ineligible
corporations, those with no experience in the telecom sector (such as Unitech and Swan
Telecom) and those who had concealed relevant information.
They way scam happend
1) a. Telecom rules and guidelines were not followed.

b. Spectrum allotted to Swan and Unitech, which did not have any previous experience in
telecom.
c. Deadline extended without any reason to enable others with vested interest.
d. Swan,Unitech sold their shares to others with higher rates that matched with
government's income.
e. Government could not reach its target by selling spectrum. The CAG decided that the
loss could be 1,77,000 crore to government because of the scam.
A joint investigative report by the CBI and the Income Tax Department alleged that Raja may
have received a 30 billion (US$470 million) bribe for moving the cut-off date for spectrum
applications forward. The changed deadline eliminated many applications, enabling Raja to
favour a few applicants. The agencies also alleged that he used accounts in his wife's name in
Mauritius and Seychelles banks for the kickbacks.
Reasons
1)Political reasons:
Co-alition governments are making central governments weaker to take decisions.
A.Raja, who was main accused, should have been removed when he was targetted by main
political parties, but he was given for second time with the fear that DMK might withdraw its
support. This decision was because of co-alition political parties.
High spending in elections is making them resort to corruption which is leading to scams. After
huge expenditure, when they are elected they are recovering the money they have put in
elections. They are not taking care of people by whom they are elected.No regulations for
Members of Parliament is also reason for their corruption leading to scam. Delay in justice made

number of politicians have no deterrence effect on them rather criminals are making their way to
assemblies.
2)Business reasons:
Businessmen sponsor politicians when they are in fray. After eletion, they seek some
concessions from politicians for their businesses, if they are elected. Politicians, being workers of
people, work for these businessmen in their offices. Businessmen sponsoring politicians,
businessmen turned politicians are in forefront of making scams.
3)Media reasons:
Growing media activism is throwing open the gates for crooked and worm-natured people resort
to it. Commercialisation of newspapers is the prime reason for having scams related to
them.Second reason is that they are being honoured and having direct relations with political
leaders leading to connive in their activities.
Initiatives to avoid scam:

1. Setting up of preventive mechanism. Prevention is better than cure. Preventing scams in bud
stage is very important.
2. Ministers, civil servants relation to be reformed.
3. Protection to civil servants. There should be a limit for transfers within a year.
4. Stopping the culture of sponsoring politicians by businessmen. It should be dealt seriously.
5. Searching ways by Election Commission sponsoring for contestants which can bring ethical
and moral persons to political arena.
6. Saving the media from rotting through checks and balances.
7. People should be aware of consequences of weak governments and should enable strong
governments.
Conclusion:
Whenever a scam raises, Indian government is dealing with scam rather than reasons behind it.
Loopholes in system need to be corrected in order to avoid these scams. If these are not dealt
properly so many scams are on the way for us. A perfect policy making and new blood in
political veins only can help India to be out of scam erA.
COMMOMWEALTH SCAM (2010)
The Commonwealth Games is an international, multi-sport event involving athletes from the
Commonwealth of Nations. The games are overseen by the commonwealth games federation
(CGF) ,which also controls the sporting programme and selects the host cities.A host city is
selected for each edition and 18 cities in 7 countries have hosted the event.There were currently
54 members of the commonwealth of nation and 72 teams participated in the games held in 2010
in India in which there were 260 events in 17 disciples .

COMMONWEALTH GAMES SCAM :
 The Commonwealth games scam involved large scale (70,000 crore) misappropriation of
money during the preparatory phase and conduct of the 2010 Commonwealth games held
in New Delhi..
 There are various other issues that were also brought into focus like maintenance of the
venues were delayed and programme management had a flop show out of the desk to
make a big mess of Commonwealth Games Scam,2010.
 There could have been no words to raise the ill works of the people concerning the big
International Sporting Event in our country.
MAIN CONCERNS OF THE SACM :
1)Sociology-Economic Impact –
The Commonwealth Games (CWG) Scam 2010 was mainly subdued to many reasons like
heavy economic expenditure that were being severely criticized of. Since there was a huge
expenditure that was being spend into such a big Commonwealth Games, so there was a
complete serenity over the fact that though being spending so much money, yet things were not
utilized for the proper ways. There were so much hush among the poor people to see such notion
of huge expenditures being spend on CWG Scam 2010, but not helping and cutting out the
financial costs over the period of time in India. This is not the only aspect, the strike over the
issues that were certain to rise like slavery of people right out by bribing them up. There were
huge volumes of children and people being hired on day night prospects which enamoured the
worst part of using them up in CWG Games Project aspect. The Commonwealth Games
(CWG) Scam 2010 was recommended to deteriorate the matter child labour being bombarded
into the collaboration of making CWG Games 2010, a bigger success.
2)No Proper Organization -
Another important reason why there was a big loss in collaboration among the people was the
bitter poor show in terms of all organizing failures that crept into the walk of Commonwealth
Games (CWG) Scam 2010. Various preparation delays were reported in accordance to the
Commonwealth Games 2010. There were nothing, but poor support staff to look after the CWG
Games 2010 schedule and places where there needs to be very proper attendance and has to be
paid on a regular basis. Several officers that were attending the state of affairs regarding the
concert came out to be much delayed since the CWG Games 2010 were of too much concern.
Moreover during the events of CWG Games Scam 2010, the selling of the tickets were totally
much to disappointed concerns since it looked like as if there were of no need to comply with the
regulations that broke into Commonwealth Games(CWG) Scam 2010. Chairman, Suresh
Kalmadi made and expressed the views over the concern on how tickets were being heavily
bribed with money and therefore there had so less audience in CWG Games 2010.
3)Infrastructure Failure -

The infrastructural support couldn't bear up the best part of the CWG Games 2010. Actually
certain projects like Airport Metro Express construction delayed out because of various aspects
and was unable to complete the project on time which gave a big issue again to Delhi
Government. Various eventual problems like event analysis and improper functioning of the
support of various games in CWG Games 2010 just did not give the best credit to side which had
seen to be CWG Scam 2010. The various equipments and venues that were even not signed and
maintained up even before the game so there were some horrible aspects of foreign sportsmen at
the CWG Games 2010. It also gave inside into the various Spots Associations to pitch down the
line in making the best out of the international event but before there could have any
improvement in building up the CWG Scam 2010 more, issues regarding Organization
Committee saw a defending actions and saw a big loss in sporting events.
4)Security Concerns –
The security issues have been tumbled out badly because there were a total wipe out of various
issues and this did not give good sights to measure up the CWG Scam 2010. Since New Delhi is
renowned for all the activities of politicians and terror attacks sometimes, so there could be the
possibility that we could have heard about the ramming terror attacks that could have broken into
the city with the outraging Commonwealth Games (CWG) Scam 2010. There would have been
total injustice if there could have been supported up with a good security support concerns
without any rising issues of terror attacks in New Delhi during CWG Games 2010.
CONCLUSION :
Suresh Kalmadi who masterminded the scam had refused to even quit his posts in Olympic
Association with tacit support of Congress party. India was humiliated in world stage of World
Olympic Association.
WAYS TO REDUCE SUCH SCAMS :
1. Increase disclosure requirements by the government on all contracts, PPPs and concessions
involving public money or assets.
2. Improve the effectiveness of parliamentary oversight on government and executive by making
parliamentary committees stronger as well as more transparent to the public.
3. Create deterrents by creating fast track prosecution for white collar crimes.
4. This may require complete overhaul and changes in our criminal justice system that is still
designed around petty crime and criminals and is totally ineffective in dealing with sophisticated
financial crimes of the day.
5. Media has played an important role in curving a public opinion, and that is why the nation as a
whole is angry and engaged on this issue.
A permanent solution, thus, to such scams and corruption is alert citizen and conscientious
media.

CONCLUSION
Scams like the 2G spectrum,Satyam scam .. kind have become an integral part of our country. If
we look at our political history, scams have shaped its architecture time and again. The
government of India always adopts a soft stance and fails to come up with a tough decision. This
is ridiculous. A dysfunctional Parliament means millions in taxpayer money going down the
drain. How can the government justify that? Tall claims are made these days about India gaining
the status of super power. But how can it be one if its governance is so weak? Political leaders
should not forget that they are but the elected representatives of the people and that they have no
right to waste taxpayers' money. For, if transparency is considered one of the pillars of successful
democracy, India falls way behind. One scam after another has continued to dot India's political
history and the tradition continues. The basic problem lies in the politicians' attitude towards
public. They still look after the people as vote banks. It's time they started treating electorates as
human beings and not as means to gain political mileage. Severe corporate governance problems
emerge out of the above-mentioned corporate wreckage. Many of these governance problems
were noticed in several other such corporate failures in USA, UK and Europe. These countries
reacted strongly to the corporate failures and codes & standards on corporate governance came to
the centre stage. Corporate scandals especially in the United States triggered reforms in corporate
governance, accounting practices and disclosures the world over. Enron debacle in 2001 and
number of other scandals involving large US companies around that period set in motion the
corporate governance reform process and resulted in the passing of the Sarbanes-Oxley Act,
2002. The main objective of the Oxley Act is to repose investor‘s confidence by preventing
corporate frauds and ensuring transparency and disclosures. Similar kinds of corporate
governance reforms are needed in India too. There is need to reform corporate governance in
India by taking harsh policy measures. Even though corporate governance mechanisms cannot
prevent unethical activity by top management completely, but they can at least act as a means of
detecting such activity before it is too late. When an apple is rotten there is no cure, but at least
the rotten apple can be removed before the infection spreads and infects the whole basket. This is
really what effective governance is about.
Suggestions and Recommendations:

1. Create a new regime of mandatory disclosures by the government and its agencies for all
contracts involving taxpayer money and/or assets
2. The government must have outside legal and advisory help while negotiating contracts and not
rely only on bureaucrats.
3. The government must ensure that our Criminal Penal code has amendments to deal with and
enable rapid prosecution of white collar crimes and scams.
4. Remove Section 311 that requires prior sanction from the government to prosecute its officers.
5. Make Parliamentary oversight of the government more effective and more institutionalised.
Make such oversights transparent and available to media and citizens.
For example, the proceedings of the parliamentary committees should be made available to the
media and public as transcripts.

6. Ensure that government policy is always about the public and not about private and personal
interests.
7. Legislation must be initiated to regulate lobbyists and business chambers, to prevent advocacy
changing to corruption and to protect against policy capture instead of policy advocacy.
8. Ensure government policies are not always bombastic rhetoric and full of loopholes for
exploitation. This will minimise administrative/political discretion.
9. Create a new cadre of independent regulators, backed by parliamentary statutes that oversees
most of these sectors.
For example, bureaucrats must be chosen as regulators only in exceptional cases of high integrity
and capability. Such Independent Regulators must also have oversight on them to ensure that
there is no regulatory capture.
10. Lastly and most importantly both media and the general public must create an awareness that
the government is a trustee of public money and assets and the people are the real owners.
If trustees violate the trust, people should not sleep, but must react.
BIBLIOGRAPHY
1. National Consumers‘ League. (2011). NCL‘s fraud center: Top scams of 2011.
National Consumers‘ League. National Institute of Justice. (1995).
2. Fraud victimization: The extent, the targets, the effects. Retrieved from http://
www.nij.gov/pubs-sum/184353.htm.
3. AIMA (1997). Corporate governance & Business Ethics.N. Delhi, excel books
4. Arora, Ramesh k and Tanjul saxena (ed)(2004) corporate governance: issues and
perspectives. Jancer: Mangaldeep.
5. Bharat Law House(2003). Bharat‘s Manual of SEBI Act, Rules, Regulations,
guidelines, circulars etc. New Delhi; Bharat Law House.
6. Panchali, J.N(1999).‖Corporate Governance: Indian Experience‖ AB ackground
paper for National Roundtable on corporate governance.
7. Rangarajan, C(2000)‖ Governance-Some Issues‖ Indian management.
8. Sarkar, J and S.sarkar (2000), ―The governance of Indian corporate‖ Indian
development reports. IGIDR.
NEWSPAPERS
9. Gupta L.C, (17 March 2004) ―Corporate governance: Indian style‖ Economic
Times.
10. Ramachandran, Sunshma, (26 Aug 2002) ―Corporate Fraud‖ The HINDU.
11. Fernando, A.C(9 july 1997) ―Corporate governance: Time for a Metamorphosis‖,
The Hindu Business Review.
12. S.Vaidyanathan, (20 Feb. 2005) ―Agenda for SEBI‘s new CEO‖, The Hindu
Business Line.


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The Great Indian Scam

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CASIRJ Volume 6 Issue 7 [Year - 2015] ISSN 2319 – 9202

THE GREAT INDIAN SCAM

Dr. Raj Nangia

• In 2010 India was ranked 87th out of 178th countries in Transparency

International Research Journal of Commerce Arts and Science

Following is the list of scams in India since independence:

1992 — Harshad Mehta Scam was worth Rs 5000 Crores.

THE GREAT INDIAN

International Research Journal of Commerce Arts and Science

4. Commonwealth Games Scam,2010

Harshad Mehta Scam (1992)

International Research Journal of Commerce Arts and Science

COURT’S REACTION TOWARDS SATYAM SCAM :

2.A CASE OF INSIDER TRADING –

International Research Journal of Commerce Arts and Science

4.UNCONVINCED ROLE OF INDEPENDENT DIRECTORS –

5.QUESTIONABLE ROLE OF AUDIT COMMITTEE –

International Research Journal of Commerce Arts and Science

COURT’S REACTION TOWARDS SATYAM SCAM :

International Research Journal of Commerce Arts and Science

case related to accounting fraud at Satyam.

2.A CASE OF INSIDER TRADING –

4.UNCONVINCED ROLE OF INDEPENDENT DIRECTORS –

International Research Journal of Commerce Arts and Science

5.QUESTIONABLE ROLE OF AUDIT COMMITTEE –

Spectrum is specific range of electromagnetic wavelength , which is used in radio, T.V.

 2G is short form of second generation wireless telephone technology.

International Research Journal of Commerce Arts and Science

They way scam happend

1) a. Telecom rules and guidelines were not followed.

International Research Journal of Commerce Arts and Science

Initiatives to avoid scam:

COMMOMWEALTH SCAM (2010)

International Research Journal of Commerce Arts and Science

COMMONWEALTH GAMES SCAM :

MAIN CONCERNS OF THE SACM :

2)No Proper Organization -

International Research Journal of Commerce Arts and Science

WAYS TO REDUCE SUCH SCAMS :

International Research Journal of Commerce Arts and Science

Suggestions and Recommendations:

International Research Journal of Commerce Arts and Science

International Research Journal of Commerce Arts and Science

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