Professional Documents
Culture Documents
A Study On The Corporate Governance Issues at SATYAM
A Study On The Corporate Governance Issues at SATYAM
CONTENTS
PARTICULARS
PAGE NO.
1-4
5
6-7
8-11
CORPORATE GOVERNANCE
Corporate Governance is typically perceived as dealing with problems that
result from the separation of leadership & control.
Shareholder
Board
Managemen
t
Employees
2
Seperation of the roles of the CEO & the Chairman: The roles of the
CEO and the Chairman are different. The CEO takes care of the senior
management whereas the chairman takes care of the board.
Appointment to the board & reappointment: The board or its specially
appointed committee selects & appoints the prospective director and gets
the person formally elected by the shareholders at the ensuring Annual
General Body Meeting.
Directors & Executives Remuneration: This is one of the mixed & vexed
issues of corporate governance that first came to the center stage. The key
issues would include
Transparency
Justifiability of the pay in the context of performance
The process adopted in determining it
Severance payments
Non-executive directors pensions
3
Protection of Shareholders rights & their executives:
There are a number of questions relating to this issue as
1. Should companies adhere to 1 share 1 vote principle always?
2. Should companies retain voting by a show of hands or by poll?
3. Can shareholders resolution be bundled?
4. Should shareholders approval be required for all major transactions?
disclosure mechanism.
6. They deal with the board structures & responsibilities.
INTRODUCTION TO SATYAM
COMPUTER CONSULTANCY LIMITED
SATYAM COMPUTER CONSULTANCY LIMITED was established on
June 24 1987. the founder of such organization was mr.Ramalinga Raju.
Chief executive officer at the time of the scam was Mr. Ram Mynampati
And chief financial officer of such was mr. Valdamani Srinivas.Non executive
directors were Krishna Palepu & Vinod.K.Dham. satyam computer consultancy
limited has its headquarter at Hyderabad.
Satyam computer services limited has its several subsidiaries:
1) Satyam BPO
Citisoft
CA Satyam
STI
Bridge Consultancy
The various services offered by the satyam compute consultancy limited
Included:
Application Software
Business process outsourcing
award 2007.
After the scam of rs.14000 crore came into light, the board of members were
Replaced temporarily by experts. Several board members retired voluntarily.
Even the auditing company, named KPMG was penalized. Several bidding
took place for acquiring satyam by several companies. The final three bidders
for satyam were L&T, Spice group and tech mahindra.
After the successful bidding, Tech mahindra acquired satyam and the
new chief executive officer is Mr. C.P. Gurnani. The two independent
After the deal was aborted, four of the prominent independent directors
resigned from the board of the company. In early January 2009, Raju
revealed that the revenue and profit figures of Satyam had been inflated for
past several years. The following were the inflated figures:
advance tax for the financial year 2009. As per the rule, the advance tax
is to be paid 4 times a year; such was not fulfilled by them.
Finally the satyam computer consultancy limited didnt have good
relationship iwt bak too. SCS was blacklisted by world Bank over
charges of Bribery.It was declared ineligible for contracts to providing:
1) improper benefit to bankstaff.
2) Failing to maintain documentation to support fees.
10
11
CONCLSION:
As earlier stated that corporate governance consist of four parties. In case of
satyam fraud, board is unable to fulfill its role & responsibilities.
SHARE HOLDERS
BOARD
MANAGEM
ENT
EMPLOYEES
Andhra police
The Sebi had in December given a clean chit to Satyam in the probe on
violation of corporate governance law.
The government has realized the need of code of conduct & whistleblower
policy, now we will discuss what is these terms and how they played an
important role.
CODE OF CONDUCT:
This Code of Business Conduct covers a wide range of business practices and
procedures. It does not cover every issue that may arise, but it sets out basic
principles to guide all employees and officers of the Company. Those who violate
the standards in this Code will be subject to disciplinary action, including possible
dismissal. Furthermore, violations of this Code may also be violations of the law
and may result in civil or criminal penalties for you, your supervisors and/or the
Company. The basic principles discussed in this Code are subject to any
Company policies covering the same issues:
BIBLIOGRAPHY
1) www.google.com
2) www.wikipedia.org
3) Business ethics: concepts and cases- velasquez.