Satyam Scam

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2. CONTENTS
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3. 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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4. BUSINESS OPERATIONS
 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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5. OVERVIEW OF SCAM
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.
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.)
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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6. 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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7. FACES BEHIND THE SCAM
Ramalinga Raju
•Satyam Founder & Chairman
B Rama Raju
•Managing Director (Brother of Ramalinga
Raju )
V Srinivas
•Ex-Chief Financial officer
S Gopalakrishnan
•PriceWaterhouse Auditor
Talluri Srinivas
•PriceWaterhouse Auditor
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8. IMMEDIATE MARKET REACTION
• NSE fell by 192.40 points , i.e. around 6.18%
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9. OVERALL IMPACT ON MARKET
STOCK MARKET SHARE HOLDERS EMPLOYEES INDIAN ECONOMY
 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
 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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10. 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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