Satyam Infosys

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WLCWLC College India

A Bridge to your Future

An Assignment on

Satyam ScandalThe mega corporate fraud

Submitted to

WLC College

For ACL-I

Submitted by :-

Vishal Shrivastava

Guided by :-

Mrs. Shikha Atri



Introduction



SatyamComputer 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.



RamlingaRaju.

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 byT

eja 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 Groups 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$ 80.09million) which was non-existent.

an understated liability of Rs. 1,230 crore (US$ 261.99million) 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





Mahendra SatyamBefore the scandal its share price was Rs 300 in oct2008.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 leastvaluable IT company in India.

Present time its share price is 107.89.

Mahendra Satyams market growth is 7,800caror.According the recent survey Mahendra Satyams rank is7th among the IT companies of India and 97th rank in allover India.

New Rise With New Name

Documents

Satyam Infosys