Satam Computer Case Study

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Satyam Computers was founded in 1987 in Hydrabad by Mr. Ramlinga Raju 2. It converted into public limited company in 1992 3. The Company offers Consulting and Information Technology services spanning various sectors 4. Mahindra Satyam is overall ranked 153 by Fortune India 500 in 2011 5. Satyam’s network covers 66 countries and 53000 employees across 6 continents 6. It is listed in BSE, NSE, NYSE 7. Satyam was as an example of “India’s Growing Success” 8. “In 2007, Ernst & Young awarded Mr. Raju with the ‘Entrepreneur of the Year’ award 9. On April 14, 2008, Satyam won awards from MZ Consult’s for being a ‘leader in India in CG and accountability’ THE RISE OF SATYAM  1987 : Satyam Computers Pvt. Ltd. Born  1991 : June- First…show more content…
 Mr. Raju falsified the bank accounts to inflate the balance sheet with balances that did not exist.  Mr. Raju also revealed that he created 6000 fake salary accounts over the past few years  He also created fake customer identity  The global head of Internal Audit illegally obtained loans of the company  He planned to acquire a 51% stake of Maytas Infrastructure Ltd. He had 35% share in Maytas properties  On December 16, 2008, the Satyam board, including its five independent directors had approved the founder’s proposal to buy the stake in Maytas Infrastructure and all of Maytas Properties, which were owned by family members of Satyam’s Chairman, Ramalinga Raju, as fully owned subsidiary for $1.6 billion.  Without shareholder approval, the directors went ahead with the management’s decision.  The World Bank banned Satyam from conducted business for 8 years due to inappropriate payments to staff  As a result Investment bank DSP Merrill Lynch terminated its engagement with company soon after it found financial irregularities  On Jan.7,2009 Raju resigned after notifying Board Members and SEBI that Satyam’s accounts had been falsified SATYAM’S SCAMS FRADULANT FIGURES Total amount of financial irregularities in…show more content…
2008 135.65 29 DEC. 2008 148.10 30 DEC. 2008 160.70 2 JAN. 2009 177.20 5 JAN. 2009 167.15 6 JAN. 2009 178.95 7 JAN. 2009 39.95  Merrill Lynch terminated its engagement with Satyam  PricewaterhouseCoopers (PwC) came under intense scrutiny and its license to operate was revoked.  Criminal charges were brought against Mr. Raju, including: criminal conspiracy, breach of trust, and forgery  New Board of Directors were appointed  Increased financial accounting disclosure  Adoption of international standards  Creation of new corporate code of conduct by Ministry Of Corporate Affairs SATYAM’S PRESENT PHASE  Raju along with 2 others accused of scandal had been granted bail from supreme court on 4Nov,2011  Appointing new Board  Board appointed by government  Satyam shares gained up by 44% day after appointment of new board  New CEO – AS Murthy  Tech Mahindra acquired Satyam on April13,2009  On 13April,2009 via auction process, 46% Stake in Satyam duty of loyalty was purchased by Tech Mahindra  July 2009, Satyam rebranded its service as “Mahindra Satyam” FINDINGS  Jobs of over 50000 technocrats were at risk  Country’s booming economy were at risk  The GDP fell by

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