WLC

WLC College India

A Bridge to your Future

An Assignment on
Satyam Scandal
The mega corporate fraud

Submitted to
WLC College
For ACL-I

Guided by :- Submitted by :-
Mrs. Shikha Atri Vishal Shrivastava
Introduction
Satyam Computer Services Ltd.
 was founded in 1987 by  Ramalinga Raju.
 Global Headquarters: Hyderabad.
Employee strength: 52,865 (including employees .
in subsidiaries and joint ventures) as on Sep 30, 2008.
1991: Debuts on Bombay Stock Exchage with an IPO oversubscribed 17 times.
1999: Satyam Infoway (Sify) becomes the first Indian Internet company listed on
Nasdaq; presence established in 30 countries.
2001: Listed on the New York Stock Exchange with trading name “SAY”.
2006: Revenue exceeds $1 billion; sets up the first "Global Innovation Hub" in
Singapore and operations in Guangzhou, China.
2007: SeptemberAwarded with Golden Peacock Award for Corporate Governance
and Compliance.
2008: Revenue crosses the $2-billion mark.
2008 Dec 16: Announces plan to buy two Maytas firms; calls off the deal within
hours in the face of shareholders' opposition; share price tumbles.
2008 Dec 23: World Bank confirms blacklisting Satyam for eight years on grounds
of data theft and bribing bank officials.
Ramalinga Raju sends shockwaves by admitting fraud. Resigns as chairman.
Ramlinga Raju.

 The Founder and Chairman of Satyam Computer Services Ltd.

The Ernst & Young Entrepreneur of the Year for Services in 1999 .
 The Dataquest IT Man of the Year in 2000.
 The CNBC's Asian Business Leader - Corporate Citizen of the Year
award in 2002.
 E&Y Entrepreneur of the Year Award in 2007
 Ramalinga Raju sends letter to board tendering his resignation
and admitting to fraud in accounting books;
 Maytas Infra Limited is among the leading Infrastructure Development,
Construction and Project Management Companies in the country with over
two decades of rich and varied experience in executing landmark projects
across the country. 
The Ernst & Young is the statutory auditor of Maytas Properties[
An infrastructure development, construction and project management
company. Maytas Infra was originally run by Teja Raju, the elder son of
Satyam Computer Services founder B Ramalinga Raju.

Securities and Exchang Board of India

 is the regulatory authority in India established under Section 3 of SEBI Act,

1992.
 Protecting the interests of investors in securities.
 Promoting the development of the securities market.
 regulating the securities market. Its regulatory jurisdiction extends over
corporates in the issuance of capital and transfer of securities
Formerly known as Satyam Computer Services Ltd. In June 2009, the
company unveiled its new brand identity “Mahindra Satyam” subsequent
to its takeover by the Mahindra Group’s IT arm, Tech Mahindra.
The Scandal
an overview
 December 16,2009: Satyam chairman Ramalinga Raju announces
plan to buy Maytas Infra and Maytas Properties owned by his sons for
$1.6 billion. Investors cry foul. Why should an IT company invest in real
estate?
 December 17,2009: Raju does a U-turn following widespread
investor protests. Acquisition plan of Maytas shelved. Inquiry ordered
by SEBI.
 Dec 23,2009 : World Bank confirms blacklisting Satyam for eight
years on grounds of data theft and bribing bank officials
 Dec 26,2009 : The crisis takes its first toll - Mangalam Srinivasan, an
independent director, quits.
 Dec 29,2009 : Three more directors quit.
 January 3,2010: Ramalinga Raju`s stake in Satyam falls to 5.13% from
8.27% as lenders sell shares.
 January 7,2010: Chairman Ramalinga Raju resigns, confesses over Rs
7,000 crore fraud. Claims cash never existed in the company and that
the aborted Maytas transaction was a last ditch effort to cover the
fraud.
January 9: Ramalinga Raju and his younger brother B Rama Raju
arrested. Central govt disbands Satyam board, appoints own directors-
Kiran Karnik, ex-Nasscom president, HDFC chairman Deepak S. Parekh
and former member of SEBI, and ex-Chairman of Securities Appellate
Tribunal C Achuthan.
Fraud Figures
 Raju confessed that Satyam's balance sheet of 30 September 2008
contained:
 inflated figures for cash and bank balances of Rs 5,040 crore
(US$ 1.07 billion) as against Rs 5,361 crore (US$ 1.14 billion) crore
reflected in the books.
 an accrued interest of Rs. 376 crore (US$ 80.09 million) which was
non-existent.
 an understated liability of Rs. 1,230 crore (US$ 261.99 million) on
account of funds was arranged by himself.
 an overstated debtors' position of Rs. 490 crore (US$ 104.37
million) (as against Rs. 2,651 crore (US$ 564.66 million) in the
books).
Conclusion
 New Rise With New Name
Mahendra Satyam
Before the scandal it’s share price was Rs 300 in oct
2008.
Just after this scandal the share price go down to Rs 6.30.
Before the scandal Satyam was the 4th ranked among IT
companies of India and on 9th jan 2009 it became least
valuable IT company in India.
Present time it’s share price is 107.89.
Mahendra Satyam’s market growth is 7,800caror.
According the recent survey Mahendra Satyam’s rank is 7 th
among the IT companies of India and 97th rank in all over
India.