INTRODUCTION

 Satyam Computers was founded in 1987.

 It converted into Public Ltd Co. in 1992.

 The company offers consulting and

information technology services spanning
various sectors.

 Mahindra Satyam is overall ranked #153 by

Fortune India 500 in 2011.

 Satyam's network covers 66 countries and

53000 employees across six continents. It is
listed in BSE, NSE, NYSE
 ABOUT RAMALINGA RAJU
 Ramalinga raju was born on
september 16,1954 in a family of
farmers .

 He founded satyam computers

and was its chairman until january
7, 2009 when he resigned from the
satyam board after admitting to
corporate fraud.
 SATYAM SCANDAL
• Raju and his brother, B Rama Raju, were arrested by the Andhra Pradesh
police on charges of breach of trust, conspiracy, cheating, falsification of
records.

• Raju has mislead various investors.

• Raju had also used dummy accounts to trade in Satyam's shares.

• He has violated the insider trading norm.

• Funds from Satyam were diverted to Mayas

• On 22 January 2009, CID told in court that the actual number of employees is
only 40,000 and not 53,000 as reported earlier and that Mr. Raju had been
allegedly withdrawing INR 20 carore rupees every month for paying these
13,000 non-existent employees.
 PWC:- PARTNER IN CRIME ?
• Satyam claimed to have an its
Balance Sheet was Non Interest
bearing deposits.
• Any reasonable company would
have invested or returned the
excess cash to the depositors so
that the cash lying without income
was clear indication for the
auditors to investigate properly.
 PWC:- PARTNER IN CRIME ?
• The auditors did not verify independently witht
the banks in which the company claim to have
deposits .
• PWC never verified the forged statements with
the bank and debtors.
• The PWC failed in due dilligence of their duties
as Satyam created many fictitious sources to
meet the analyst expectations a numerous times
and PWC was never able to detect these things.
 PWC
One of the biggest auditing firms around the
world,PWC audited Satyam Books of Accounts
for nearly 10 years but not able to detect any
financial scam.

PWC is equally responsible for the fraud since

it has signed all the financial statements.
After effects repurcussions:
 On 9th April 2015, Raju and nine others were found
guilty and were sentenced to 7 years imprisionment
by Hyderabad Court with 5 crore penalty.
 SEBI imposed two years ban on Price Water House
Network Entities for issuing audit certificates to any
listed companies in India.
 ICAI cancelled the membrship of six chartered
accountants with respect to the Satyam Scam.
TAKEN ACTION
 New board of directors were
appointed.
 Disclosure of pledged securities.
 Increased financial accounting
disclosure.
 Adoption of international
standards.
 Creation of new corporate code of
conduct by Ministry of Corporate
Affairs. Steps taken by ICAI.
 Both RAMAJINGA RAJU and
RAMA RAJU were arrested.
 ACQUISITION BY MAHINDRA

 Tech Mahindra acquired 46% stake in Satyam

by formal public auction process on April
13,2009.
 On July 2009, Satyam rebranded its services as
“Mahindra Satyam”.
 Tech Mahindra merged with Satyam itself to
create nation's fifth largest software services
company with a turnover of $2.7 billion.
CONCLUSIONS:
• PWC missed many signs that implied either
the auditor were grossly inept or collusion
with Mr.Ramlinga Raju and company for
comitting the fraud.
• Merrill Lynch an investment banker discovered
the fraud in 10 days where as PWC audited
the accounts of satyam for almost past 9 years
and still failed to discover the financial scam