Satyam Scam
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Transcript of Satyam Scam
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Presented by:Mayank SethGurbhakshish Singh
Submitted To : RVM Finishingschool.comwww.rvmfinishingschool.com +91-9550812083
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CONTENTS
1. INTRODUCTION2. BUSINESS OPERATIONS3. OVERVIEW OF SCAM4. FACES BEHIND THE SCAM5. IMMEDIATE MARKET REACTION6. OVERALL IMPACT ON MARKET7. ACQUISITION BY MAHINDRA
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INTRODUCTION
1987
•Satyam computers was founded by Ramalinga Raju
•He started the Satyam computers with 20 employees
1991
•Converted into Public Ltd Co. and listed in BSE, NSE
•First Indian company to be listed in three international exchanges NYSE,DOWJONES & EURONEXT
2000
•Declared one of the 100 most pioneering technology companies by World Economic Forum
2007
•Become the 1st Asian company to features in the training magazine’s list of top 125 companies for learning
2008
•4th
fastest growing IT company in India
•Satyam network covers 66 countries and 53,000 employees across the globe
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BUSINESS OPERATIONS
IT
HEALTH CARE
AUTOMOTIVE TELECOM & MEDIA
BANKING & FINANCE
BIO-TECH
Satyam computers is an Indian multinational provider of Information Technology (IT), Networking Technology Solutions and Business Support Services (BPO) to the telecommunications industry. It is Headquartered at Mumbai, India
The company offers consulting and information technology services spanning various sectors like software development, outsourcing, CRM & consulting
As per the advanced technology system, Satyam technologies were used in all parts of industries
OPERATIONS MAJOR CLIENTS
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OVERVIEW OF SCAM
The figures came into picture of Satyam scam are: Inflated ( non-existent) Cash and Bank balance of
Rs. 5,040 crores(as against INR 5361 crore reflected in the books)
An accrued interest of Rs. 376 crore which is non-existent.
An understated liability of Rs. 1,230 crore. An over stated debtors position of Rs. 490 crore(as
against 2651 reflected in the books.)
It was scandalous morning of India and global economy on 7th jan,2009 when the news came in the market of Satyam scandal. The founder member of Satyam Mr. Ramalinga Raju confesses about manipulating the financial statements of the company. The revenue made by the company were overstated.
Actual number of employees is only 40,000 and not 53,000 and Mr. Raju had been allegedly withdrawing INR 20 crore rupees every month for paying these 13,000 non-existent employees.
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Maytas is a reverse name of Satyam, is a company owned by “Raju’s Sons” Maytas infra
Maytas properties Satyam planned to buy Maytas to fill the gap in the Balance Sheet Floated two other companies for their own purpose Without taking permission of the shareholders. Failed to repay the loan & transfer of money Funds from Satyam were diverted to Maytas
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FACES BEHIND THE SCAMRamalinga Raju • Satyam Founder & Chairman
B Rama Raju • Managing Director (Brother of Ramalinga
Raju )
V Srinivas • Ex-Chief Financial officer
S Gopalakrishnan• Price Waterhouse Auditor
Talluri Srinivas• Price Waterhouse Auditor
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IMMEDIATE MARKET REACTION
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• NSE fell by 192.40 points , i.e. around 6.18%
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OVERALL IMPACT ON MARKET
Before the
scandal it’s share price was Rs 300 on Oct 2008 & just after this scandal the share price went down to Rs 6.30
STOCK MARKET SHARE HOLDERS EMPLOYEES INDIAN ECONOMY
Due to a downfall in market shareholder loses Rs.9374 crore a day.
Jobs of over 50,000 technocrats were at risk
The GDP fell by 0.4% & the Indian economy fell dramatically
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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.
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