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SATYAM

SCAM

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Born- September 16, 1954 { Bhimavaram ,

Andhra Pradesh, India}

Residence- Hyderabad, Andhra Pradesh, India

Nationality- IndianOccupation- Former Chairman of Satyam

Computer services

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Traditional agriculture business

Spinning &weaving mill( sri satyam)

Real estate business

Construction company(satyam construction)

1987 Satyam computers

1992 public

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SATYAM

COMPUTERS WHATIT IS ABOUT ?

4th Largest IT Outsourcing Company of India

Employees more than 50,000 people in India

High Global Reputation

Offers Services to more than 550 MNCs

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Former chairman B.Ramalinga Raju is the prime

convict in the case with several other board

members

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SATYAM Scam Involves Amount Close To 10,000

Crore

SATYAM is the Fourth largest IT firm in INDIACarrying india's outsourcing image globaly, so it's

about nation's image

December the 16th, 2008: $1.6 billion bid for two Maytascompanies i.e. Maytas Infrastructure Ltd and Maytas

Properties Ltd

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Thumbs down given by investors and the market

forced him to retreat within 12 hours

Share prices plunges by 55% on concerns about

Satyams corporate governance

December 23, 2008: World Bank announced 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

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December 28 :Mangalam Srinivasan, announced

resignation followed by the resignation of three

more independent directors

January 7, 2009: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.

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Satyams auditors Price Waterhouse finally admitted that

its audit report was wrong as it was based on wrong

financial statements provided by the Satyams

management

The companys balance sheet was inflated to Rs 5,361

crore against the actual Rs 5,040 crore.

Satyams CFO Srinivas Vadlamani confessed to having

inflated the number of employees by 10,000.

This helped in drawing around Rs 20 crore per month

from the related but fictitious salary accounts

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Youngest sibling of Ramalinga Raju who owned 4.3

per cent in Maytas Infra, and recovered 112 sale

deeds of different land purchases and developmentagreements

Senior partners S Gopalakrishnan and Srinivas

Talluri of the auditing firm PricewaterhouseCoopers(PwC) were arrested for their alleged role in the

Satyam scandal

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Jobs of over 50,000 technocrats were at risk

Countrys booming economy feared slight collapse

as countrys GDP fell by estimated 0.4%

Indias IT sector suffered downturn as its image

was tarnished globally

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Reforms

Governance ReformIndependent Directors

After the Satyam scandal, investors and regulators called for strengtheningthe regulatory environment in the securities markets.

The Ministry of Corporate Affairs is devising a new Corporate Code and is

considering changing the securities laws to make it easier for shareholders to

bring class action lawsuits.

Disclosure of Pledged Securities

After Satyam, the SEBI increased disclosure obligations of promoters and

controlling shareholders.

Increased Financial Accounting Disclosures

The SEBI also recently proposed requiring companies to disclose theirbalance sheet positions twice a year.

IFRS (Adoption of International Standards)

Satyam strengthened India's commitment to adopting International Financial

Reporting Standards ("IFRS") by 2011.

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Contd..

Increased Financial Accounting Disclosures

The SEBI also recently proposed requiring companies to disclose their balance sheet

positions twice a year.

IFRS (Adoption of International Standards)

Satyam strengthened India's commitment to adopting International FinancialReporting Standards ("IFRS") by 2011.

Creation of New Corporate Code - Ministry of Corporate Affairs

New code will apply along with the regulatory obligations imposed by the SEBI.

Adherence to the Code will be voluntary; however, every company that deviates fromthe code's requirements must disclose the deviations to the ministry.

Tech Mahindra purchased 51 percent of Satyam on April 16, 2009, successfully

saving the firm from a complete collapse. With the right changes, India can minimize

the rate and size of accounting fraud in the Indian capital markets.

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