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Key highlights of the merger The exchange ratio recommended by the valuers and approved by both the boards

is 2 shares of Tech Mahindra (face value of Rs. 10 each), for every 17 shares of Mahindra Satyam (face value of Rs. 2 each). On a pro-forma basis, the Mahindra Group will own 26.3% in the combined entity, British Telecom will own 12.8%, 10.4% will be held as treasury stock, 34.4% to be held by the public shareholders of Mahindra Satyam and the balance 16.1% will be held by the public shareholders of Tech Mahindra. Tech Mahindra will issue 10.34 crore new shares, thereby increasing its outstanding shares to 23.08 crore and its equity capital to Rs 230.8 crore. Merger benefits and synergies The merger will result in the creation of a new offshore services leader with revenues of approximately US$2.4bn in revenues, approximately 75,000+ strong work force and 350+ active clients (including Fortune Global 500 companies), across 54 countries. The joint entity will have a unified „go-to-market‟ strategy with deep competencies and a balanced mix of revenues from Telecom, Manufacturing, Technology, Media & Entertainment, Banking Financial Services and Insurance, Retail and Healthcare. Revenues will be well balanced with a diversified global footprint that would boast of contribution from Americas at 42%, Europe at 35% and Emerging Markets at 23%, The combined entity will leverage Tech Mahindra‟s expertise in Mobility, System Integration, and delivery of large transformations and to better penetrate the opportunity presented by Mahindra Satyam‟s diverse set of clients across multiple verticals. Likewise Mahindra Satyam‟s expertise in Enterprise Solutions will enable a more complete value pr SlideShare

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19 54. Ramaling a Raju? • Ramali ng a Raju w as born o n Sept ember 16 . A tr adit ional agricult .Who is B.

ur al f amil y of t he K SHA TRIY A (RA JU) Commu nit y of A ndhr a Pr adesh. • He f ounded Sa ty am Comput er s and w as i ts Chair man un ti l January 7. 2009 when he r esigned fr om the Sa ty am boar d a ft er admit .

• Sa ty am w as un til r .ti ng t o c orpor a t e fr aud .

ec en tl y per ceiv e d to be a mongs t the t op Ind ian IT v endor s . • Raju h as a dmit t ed to ov er s t a ti ng the c ompa n y's c ash r es er v .

es by USD $ 1 . La t er . 5 b illion . a per son in v olv ed in the in v es ti g a tion of th e c ompan y said tha t the c ompa n y's asset s w er e not .

f or g . • Raju is c urr en tl y hel d in Hy der abad's Cha nchal g uda jail on c rim inal char g es inclu ding fr aud. but ins t ead si phoned of f by Ramali ng a Raju .in flat ed.

chea ti ng .er y . . embe zz lemen t and ins ider tr ading . “Ca r eer of B.

• Raju f ounded Sa ty am in 19 87 .R amaling a Raju” • He w as fir s t busi ness man in the fiel d of c ons tru ction and t e x ti les. • He s t art ed an sa ty am c omput er s with .

• Sa ty am w as lis t ed in UN E . • Lis t ed in NEW Y ORK S T OCK EX CHA NG E in 200 1.20 empl oy ees in 198 7. • Sa ty am w as lis t ed in IN DIA N S T OCK EX CH AN GE in 199 1.

SC O( ams t er dum ) in 20 08 . • Ther e w er e 520 00 empl oy ees w orkin g in Sa ty am in sep t ember 2008 .

.

• .“A wards” • Ern s t&Y oung En tr epr eneur of the Y ear Ser vices Aw ar d1 999 .

Da t aques t IT Man o f the Y ear Aw ar d 2000 • As ia Bus ine ss Leader A w ar d 200 2 • Erns t &Y oung En tr epr eneur of t he Y ear 20 07 ( r e v ok ed a ft er the fr aud w as c on f essed ) .

• Golden P eac ock Aw ar df or Corpor a t e Go v ernance 200 8( r e v ok ed a ft er the fr aud w as c on f essed ) • Emp lo y ees spr ead o v er man y c oun tri es .

“The E nti re Story ” • Ramaling a Raju f ounded Sa ty am Comp ut er s in 19 87 and w as i ts .

• Af t er being hel d in Hy der abad 's Chan chalgu da jail on char .Chair man un ti l January 7. 2 009 when he r esigned fr om t he S a ty am boar d a ft er admit ti ng t o chea ti ng si x mil li on shar eholder s.

• Raju w as gr an t ed b ail on 2 5.g es i nclud ing chea ti ng . 20 11. Raju w as gr an t ed bai l on c ondit ion tha t he s hould r eport t o the loc . embe zz lemen t and ins ider tr ading . 3.

al p olice s t a ti on once a da ya nd tha t he shou ldn 't a t t emp t t ot ampe r with the curr en t e vidence .

• A bot ched acqui si ti on a t t emp t in v olving Ma y t as in December .

• He admi t t ed t . • In January 20 09 .200 8 led t o a plung e in the shar e pri ce of Sa ty am. Raju ind ic a t ed tha t Sa ty am's acc oun ts had been f alsi fi ed ov er a num ber of y ear s.

5 Bill ion US Doll ar s and r esigned fr om t he S a ty am boar d on January 7. 2009.o an acc oun ti ng dupery t o the tune of 70 00 c r or e rup ee s or 1. .

w er e arr . B Rama Raju . Raju and his br other .Wha t crime he has c ons titut ed? 1.

3. Raju has misl ead v arious in v es t or s. chea ting . Raju . 2. f al sifi ca tio n of r eco r ds.es t ed b y the Andhr a Pr adesh poli ce on char g es of br each o f trus t. co nspi r acy .

Funds fr om Sa ty am w er e di v er t ed t o Ma yt as 6. On . 5. He has viola t ed the in sider tr ad in g norm.had also used dumm y acco un ts t o tr ade in Sa ty am's shar es. 4.

000 as r ep ort ed earli er and tha t Mr . CID t old in c ourt tha t the act ual numbe r of emplo y ee s is only 40.22 Januar y 200 9.000 and not 53. Raju had b ee n all eg ed ly with dr a win g INR 20 cr or e .

000 non e xis t en t empl o y ees .rupees e v er y mo n th f or p a yi ng these 13. .

• In V en tur e Global Enginee ring vs Sa ty am Comput er Ser vices L t d 20 .

1) . M r .10 (8 ) SCC 660 On being ques ti oned b y cri min al in v es ti g a ti on depart men t of t he Andhr a Pr adesh police. Raju r eport edly admi t t ed t o usi ng S a ty am (r esp onden t no.

3.mone yf or bu ying prim e land in and ar ound Hy der abad. • T en Im aginary fi x ed depos it s Raju admi t t ed tha t Sa ty am‟ s fi x ed d eposi ts whic h supp osedl y gr e w fr om Rs.3 5 cr or .

332 0. .e in 199 8 99 t o a mas si v e Rs.1 9 cr or e in 200 7 08 ar e all f ak e.

Raju w an t ed t o t ak .R eason s f or Sa ty am Sc am : 1.

(c ompan y of hi s sons ).e ov er his MA YT AS INFRA and MA YT AS PR OPER TIE S . 3. W orld bank . He w as blam ed tha t he w as usi ng the funds of the in v es t or sf or th ef amil y busi ness . 2.

had banned the sa ty am t o t ak e an y ser vices f or 8 y ear s ( due t o il leg al pr ofit and lack of essen ti al d ocumen t) . «‹›» 1 /33 Related   B Ramalinga Raju 4288 views  Satyam scam 3543 views .

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and the Mumbai stock exchange. National stock exchange.including engineering and product development. • The company was listed with New York stock exchange.supply chain management.• He founded Satyam Computers and was its Chairman until January 7..• Raju has admitted to overstating the companys cash reserves by USD$ 1. embezzlement and insider trading.+ Follow Satyam scam. client relationshipmanagement. 5. cheating. the company unveiled its new brand identity “Mahindra Satyam” 4. Presentation Transcript      1. In June 2009. 2009 when he resigned from the Satyam board after admitting to corporate fraud. Who is B. PATNA 1 year ago Subscribe to comments Post Comment Satyam scam. B Ramalinga Raju. Advocate/Student at Patna MY PRESENTATION AT CHANAKYA NATIONAL LAW UNIVERSITY. a person involved in the investigation of the company said that the companys assets were not inflated.212 views 1 comment 1–1 of 1 comment  Kamaljeet Singh. by Kamaljeet Singh on Oct 19. 1954.• Raju is currently held in Hyderabads Chanchalguda jail on criminal charges including fraud.5 billion. forgery. Later. WHITE COLLAR CRIMES WITH SPECIAL REFERENCE TO “SATYAM SCAM” 2. “SATYAM COMPUTER SERVICE LIMITED”•Satyam Computer Services Limited was founded in1987 by Mr. Ramalinga Raju?• Ramalinga Raju was born on September 16. .. 3. 2011   4. A traditional agricultural family of the KSHATRIYA (RAJU) Community of Andhra Pradesh. but instead siphoned off by Ramalinga Raju. business process management andbusiness intelligence. • Satyam was until recently perceived to be amongst the top Indian IT vendors.•The company offers consulting and informationtechnology services spanning various sectors.

CID told in court that the actual number of employees is only 40. Maytas Infra was originally run by Satyam Computer Services founder B Ramalinga Raju. embezzlement and insider trading. Garagaparru. Ramalinga Raju”• He was first businessman in the field of construction and textiles. 2009 when he resigned from the Satyam board after admitting to cheating six million shareholders. falsification of records. HOW THIS SCAM HAS RELATION WITH “MAYTAS”• Maytas refers to a group of companies founded by B.• Analysts in India have termed the Satyam scandal Indias own Enron scandal. family. • In Venture Global Engineering vs Satyam Computer Services Ltd 2010 (8) SCC 660 On being questioned by criminal investigation department of the Andhra Pradesh police.000 non-existent employees.000 and not 53. “The Entire Story”• Ramalinga Raju founded Satyam Computers in 1987 and was its Chairman until January 7.• Satyam was listed in UNESCO(amsterdum) in 2008. 10. Raju indicated that Satyams accounts had been falsified over a number of years. 13.35 crore in 1998-99 to a massive Rs. Mr. He has violated the insider trading norm.• Maytas Infra Limited: An infrastructure development.• Ten Imaginary fixed deposits Raju admitted that Satyam‟s fixed deposits which supposedly grew from Rs.• He started an satyam computers with 20 employees in 1987. .• Dataquest IT Man of the Year Award 2000• Asia Business Leader Award 2002• Ernst & Young Entrepreneur of the Year 2007 (revoked after the fraud was confessed)• Golden Peacock Award for Corporate Governance 2008 (revoked after the fraud was confessed)• Employees spread over many countries 8.3.19 crore in 200708 are all fake. • A botched acquisition attempt involving Maytas in December 2008 led to a plunge in the share price of Satyam. “Society‟s Reaction”• The people of his native village. construction and project management company.4.1) money for buying prime land in and around Hyderabad.owned corporate environment. cheating.2011.• Satyam was listed in INDIAN STOCK EXCHANGE in 1991.2. hail the development works undertaken by the Raju Foundation.• He admitted to an accounting dupery to the tune of 7000 crore rupees or 1. Raju and his brother.5 Billion US Dollars and resigned from the Satyam board on January 7. “Career of B.• Raju founded Satyam in 1987.000 as reported earlier and that Mr. “Awards”• Ernst & Young Entrepreneur of the Year Services Award 1999.• Some social commentators see it more as a part of a broader problem relating to Indias caste-based.• There were 52000 employees working in Satyam in september 2008 7. It includes Maytas Properties and Maytas Infra Limited.2. What crime he has constituted?1.(company of his sons).• In January 2009. Raju reportedly admitted to using Satyam (respondent no.3.• Raju was granted bail on 25. Reasons for Satyam Scam:-1. B Rama Raju. Raju had been allegedly withdrawing INR 20 crore rupees every month for paying these 13.• The Citizens for a Better Public Transport in Hyderabad (CBPTH) demanded a CBI inquiry into the process of how Maytas bagged the Hyderabad Metro Rail project. were arrested by the Andhra Pradesh police on charges of breach of trust. 11. On 22 January 2009. World bank had banned the satyam to take any services for 8 years (due to illegal profit and lack of essential document). 2009. 3320.3.         6. Ramalinga Raju.• After being held in Hyderabads Chanchalguda jail on charges including cheating. 3. He was blamed that he was using the funds of the investors for the family business. 14. 12. the charitable arm of Satyam. Raju has mislead various investors. Raju wanted to take over his MAYTAS INFRA and MAYTAS PROPERTIES. conspiracy. Funds from Satyam were diverted to Maytas6. Raju was granted bail on condition that he should report to the local police station once a day and that he shouldnt attempt to tamper with the current evidence 9.• A property development company founded in 2005.• Listed in NEW YORK STOCK EXCHANGE in 2001.5. Raju had also used dummy accounts to trade in Satyams shares.

800crore.• Present time it‟s share price is 107. The Credit Suisse Group AG (SIX: CSGN. 20. i.2009 the state government of Andhra Pradesh forced to end its unprecedented generosity and cancel the concession agreement with the group on the Rs 12. including the state Crime Investigation Department.• The CBPTH convener C Ramachandraiah alleged that the state government had been favouring Maytas for infrastructure projects.30.share index.• Satyams shares fell to 11. It is expected to discontinue some of its businesses. Who is Auditor? has to be a Chartered Accountant under the Chartered Accountants Act.• The Satyam scam effect has started its infectious presence. service lines or cease to exist in certain geographies.• On July 21. their lowest level since March 1998.7. He is the person appointed to examine the books of account1949. an auditor is required toas required by law. 1. 22. 16.132-crore Hyderabad Metro Rail project. 19. 21.000 odd people and indirectly supports more than a million Indians.• The New York Stock Exchange has halted trading in Satyam stock• Indias National Stock Exchange has announced that it will remove Satyam from its S&P CNX Nifty 50. • SEBI. NYSE: CS) is a Swiss multinational financial services company headquartered in Zurich. its license to work in India may be revoked. . express an . • In August 2009.• Before the scandal Satyam was the 4th ranked among IT companies of India and on 9th jan2009 it became least valuable IT company in India. 2009.e. and to report upon them to the company‟s Audit means theshareholders. if found guilty. a case was registered against the promoters of the company by the Hyderabad police under Section 406 (breach of trust) and Section 420 (cheating) of the Indian Penal Code 18. first and foremost23. a balance sheet. listed stocks of other Indian companies have started taken a severe beating. the Citizens for a Better Public Transport in Hyderabad (CBPTH) demanded a CBI inquiry into the process of how Maytas bagged the Hyderabad Metro Rail project. 17. profit and loss account and other financial statements Under the Companies Act.50 rupees on 10 January 2009. • Satyam was the 2008 winner of the coveted Golden Peacock Award for Corporate Governance under Risk Management and Compliance Issues.89.         15. the Company Law Board decided to bar the current board of Satyam from functioning. • The Government certainly cannot remain aloof and allow Satyam to die off especially when it provides occupation to 53. • It came under the scanner due to its association with B. Mahendra Satyam‟s market growth is 7. • On 8. according to Gartner study.• Bank of America and State Farm Insurance terminated its engagement with the company.• There were allegations that funds from Satyam were diverted to Maytas.• The Andhra Pradesh government has had paid Rs.• Credit Suisse suspended its coverage of Satyam. Just after this scandal the share price go down to Rs 6.S. and the accounts of a company registered under the Companies Act.• Turning point:.In wake of the Satyam scam. “IMPACT OF SATYAM SCAM ON INDIAN ECONOMY”• Although several companies are trying to have a bite into Satyam Computers.800 crore to Maytas Infra towards works under the irrigation departments Jalayagnam project. “CONSEQUENCES”• Before the scandal it‟s share price was Rs 300 in oct 2008. probed the Maytas affair after B Ramalinga Raju admitted to serious financial scam in Satyam Computer. U. An Auditor. the company is likely to exist in its current form. causing the Government agencies to verify the infrastructure company‟s records as well.• Huge losses to investors aside.• Indian firms are looking into methods to avoid scenarios of such scams within their companies. Ramalinga Raju. also said that.• On 10 January 2009. Infrastructure Leasing & Financial Services replaced B Ramalinga Raju as promoter of Maytas Infra. the stock market regulator. the Satyam scandal has caused “serious damage” to India Inc‟s reputation as well as the country‟s regulatory authorities outside. Switzerland. which was stripped from them in the aftermath of the scandal.• Various agencies. examination or assessment of a company‟s annual accounts. compared to a high of 544 rupees in 2008.

2. The auditors are3320. in 2006. test-check of accounting transactions.4462 crore was lying unused in its current account. Further.• The management should formulate appropriate policies and procedures which would reduce such risks.• Companies whose shares are publicly traded should be required to have audit committees to monitor the internal control system and provide important links to the internal audit staff.67% in 2005-06 to 8. The roleof Satyam‟s auditors is under scanner.     Connect on LinkedIn Follow us on Twitter Find us on Facebook Find us on Google+ . 26. • There is a need to clarify the duties of external auditors. the company policeincluding the auditors seemed to ignore the accusations. Undisclosed pledges• Satyam also procured a loan of about Rs. it wasbuilding up continuously from over years. in light of Satyam scamThis fraud was not committed overnight. he transferred these shares to his family‟s company. “Decrease in holdings”1. The holdings of Raju and his family decreased from 15. This amount was neither distributed among shareholders in the shape of dividend. nor the auditors seemed to question this. from which he took out loan using his shares as collateral. 25. inspect its assets. 24.• Be obliged to utilise tests that provide reasonable assurance of detection of fraud• Evaluate the strength of the overall control environment• Facilitate the identification of areas of high audit risk by reviewing the procedure analytically• Communicate their role and responsibilities to all those who rely on their work (ie nature and limitation of audit)• Report directly to the public any material irregularities and illegal acts discovered during an audit.19 crore in 2007-08 are all fake. However. early this year to a meagre 2.• Sanctions against the perpetrators of financial statement fraud should be increased by imposing fines and other deterrent measures like barring from corporate office. 30. 3. 27.3% without anybody noticing. Ten Imaginary fixed deposits Raju admitted that Satyam‟s fixed deposits which supposedly grew from Rs. 28. However. Suggestions towards Auditors• Evaluate the potential for fraud in a given audit engagement. It wasn‟t as if no one was ever suspicious of Satyam‟s dodgy numbers. the auditor needs to examine the company‟s internal accounting system. whichcould have been caught much before it acquired the„massive‟ status. as it is usually done. there is a need to prevent innocent managers from being too risk averse. Role of auditors.• The audit report should include „a letter from the Chairman of the audit committee discussing the committees responsibilities and activities during the year. Ltd. Further.• Management should ensure that the internal audit staffs are able to prevent and detect financial statement fraud. But neither independent board members. an enormous amount of Rs.35 crore in 1998-99 to a massive Rs. supposed to have an independent bank confirmation of such things in the form of a bank statement and should have obtained certificates from the banks on the tax deducted on the interest accruing on the fixed deposits.       opinion as to whether the annual accounts give a true and fair view of the company‟s state of affairs and financial position. in this case. It was accused of tax fraud and insider trading back in 2003. To formulate such an opinion. 3. They ignoredsome of the obvious indications of embezzlementand thus failed to catch on the massive scam. SRSR Holdings Pvt.61% in September 2008 and finally. companies should be required to institute sufficient internal management controls. 29. nor was it used to earn valuable interest. 1230 crore without appropriate disclosure. HOW THESE SCAMS CAN BE CONTROLLED• In addition to the present statutory requirement.

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