V History of corporate governance in India

V Current problems in the Indian corporate

sector

V The Satyam Scandal

V 2irst phase: 1947 ² late 1960s

V Second phase (Socialist): early 1970s-mid

1980s

V Third phase (Post ² Liberalization): 1991

onwards
V Poor economy

V Sophisticated legal rules regarding listing

and trading

V 2our operational stock exchanges

V 20 dominant family groups in the

corporate sector
V ðominant family groups under pressure:
The Monopolies Commission

V Competition from a new population of

entrepreneurs

V 2inancial institutions as shareholders

V þpening of public sectors to private investment

V 1992: Securities and Exchange Board of India (SEBI)

V 1998: 2irst Code of Corporate Governance:

compliance was voluntary

V 2000: Birla Committee Report -> Clause 49 of the

Listing Agreement was introduced

V 2003: the Murthy Committee -> Clause 49 became

a law on January 1, 2006
V Heavily concentrated ownership

V Pyramidal structures

V Tunneling of funds

V ðominant v. minority shareholders

ÈCompany Profile

È2irst Incidents

ÈUnveiling the 2raud

ÈCommitting the
2raud: Main Actors

ÈConsequences
V 2ounded in 1987 by B. Ramalinga Raju

V Listed on the NYSE and the Bombay Stock

Exchange

V þperates in IT, business services, computer

software

V Major outsourcing corporation in India

V Awarded repeatedly for excelling in corporate

governance, transparency and innovation
Èþctober 2008: Satyam
blacklisted by the World Bank
on accusations of data theft

Èðecember 2008: the

intercepted purchase of
Maytas Properties and Maytas
Infrastructure
V January 7, 2009: Mr.
Raju admitting to the
Board of ðirectors
persistent
accounting
irregularities.

‰
 
 



 




   

V ¢
 


- Inflated assets by $ 1.47 billion

- Underreported liabilities
- þverstated quarterly income on a regular basis
- 2alsified bank accounts
- Created fake salary accounts and misappropriated the money
- Took loans from the company unlawfully

V u  
  

  

 

V   

V The Stock Exchange

V Criminal and civil charges

V The fate of the company post-crisis

V Reforms in the corporate governance

sector