Satyam Scandal

and
Corporate Governance

Created by: Karan.S.Sahni

PGPM-0810-07
International Academy of management &
Entrepreneurship
Agenda

Introduction to satyam
Ramalinga Raju
Scandal(SATYAM-ASATYAM)

corporate Governance
…with a presence across the globe
20 development centers spread across the globe.
Operations in 55 countries, 6 continents
A Pioneer…
Pioneered delivery of offshore service (John Deere & Co.)

First Indian Co. to set-up dedicated satellite link

First IT company to get ITAA certification

Set-up India’s first private ISP – SIFY

Among world’s first 10 companies to get SEI-CMM Level 5 assessment

Forming Alliances with best of breed technology vendors very early on

Adoption of Verticalization and a customer-centric organizational Structure

Pioneered ITES quality framework – eSCM

Among the first to be certified under BS 7799 for ISMS

First & only Lead Auditor for eSCM

…providing end-to-end services

Strategic IT Consulting

Product Development Services Embedded SystemsRobotics

Chip Design R&D Services

Enterprise Application Deployment and Integration Data Warehousing

Business Intelligence SCMCRM Knowledge Management

Managed IT Services

Software Development & Maintenance

Business Process Outsourcing

…and trusted by
Ø 8 of the top 10 Auto majors

Ø 7 of the top 10 Electronics and Electrical Equipment Manufacturers

Ø 6 of the top 10 Pharmaceutical companies

Ø 4 of the top 5 Networking and Other Communication Equipment

Manufacturers

Ø 3 of the top 5 Healthcare companies

Ø 2 of the top 5 Securities companies

 About Ramalinga Raju

Ramalinga Raju born on 16th sep,1954 in a family of farmers

In Bhimavaram town of Andhra Pradesh
He was an average student in class
He completed his (B. Com) degree in 1975 from Andhra
Loyola College at Vijayawada
Raju's father, was one of the first farmers to start
commercial grape production in Hyderabad.
The agribusiness' profits also went a long way in educating
Ramalinga, the eldest son.
He did his MBA from Ohio University, USA.
 SATYAM-ASATYAM
• The satyam scandal broke when INDIA was getting its 1st
hard knocks from the global slowdown
Ø Raju confessed that Satyam's balance sheet of 30 September 2008
contained:
• Inflated figures for cash and bank balances of INR 5,040 crore (as against INR
5,361 crore reflected in the books).
• An accrued interest of INR 376 crore which was non-existent.
• An understated liability of INR 1,230 crore on account of funds was arranged by
himself.
• An overstated debtors' position of INR 490 crore (as against INR 2,651 crore in
the books).
 CORPORATE GOVERNANCE
• Corporate governance basically refers to a set of systems and subsystems by
which a company is controlled and directed.
• Corporate governance appears to be ineffective in India in certain cases and it is
no surprise when it comes to Satyam episode.
• The emphasis of corporate governance should be on economic efficiency, that
is, creation and enhancement of value for shareholders.
• Hallmark of good corporate governance
It is transparent and effective.
It is able to prevent corporate crimes.
It seeks to maximize the long run corporate value.
It is ethical and socially responsible.
Thank You