WAC Individual Assignment 1 (4th October)

Situation and Instructions

On December 16, 2008 market capitalization of Satyam Computers (Satyam) was hovering around Rs. 15,262
crores before the company announced the Rs. 8,000 crores acquisition deal of two infrastructure firms promoted
by the kin of the firms chairman Ramalinga Raju. In less than a months time, on January 7, 2009 Ramalinga
Raju tendered his resignation and confessed to an accounting fraud of close to Rs. 7,800 crores. He and his
management team have been falsifying revenue and profit numbers for several quarters and the Satyams
balance sheet has been showing cash that never existed. On January 9, 2009 Satyams market capitalization fell
to about Rs. 1,607 crores.

The episode has international ramifications. Satyam serves as the back office for some of the largest banks,
manufacturers, healthcare and media companies in the world, handling everything from computer systems to
customer service. Clients have included General Electric, General Motors, Nestl and the US government. In
some cases, Satyam is even responsible for clients finances and accounting. Investors in USA have initiated
two class action suits against the company for its American Depository Receipts. Uncertainty surrounds the
survival of the company. Customers are reassessing their contracts with the company and its 53,000 employees
are in a shock.

Assume that you are the Client Account Manager with Satyam, responsible for managing Satyams relationship
with General Motors (GM) in the USA. You have your team of software engineers and project managers who
execute several projects at India. These projects have been outsourced by GM to Satyam and it is your
responsibility to ensure that these projects are executed on time, within budget and with high quality
deliverables. GMs Divisional IT Manager gets update from you about the progress of the projects and you
divide your time between your offshore location at Hyderabad and GMs headquarters at Detroit, USA to work
closely with your Satyam team as well as with your client.

On the afternoon of January 7, 2009 you are about to travel to Detroit for upcoming client meetings when this
news about CEO-level fraud became public. Your team members are absolutely worried that the company
would not be able to run after such a large-scale fraud and they would be out of job in a few days time. Your
client, the GM IT Manager has already called you to inform about their concerns with continuation of ongoing
projects, and want to know if you or your management could provide any guarantee that these critical projects
would not be derailed. They are also considering to take the projects away from Satyam and give them to TCS.
You speak to your Satyam business head and the HR manager, and they ask you to continue work in BAU
(Business as usual) mode.

You need to write an internal memo to your all your Satyam team members asking them to not to panic and
continue to work as per plans, and an official letter to your client that they have no reason to worry about the
ongoing projects as no work would be impacted due corporate level accounting mischiefs.

These communications should be about 500 words in length (each of them) and they have to be written in a
single Word document with a page break in between. Make assumptions, if any, to complete these. Submit the
assignment before 12 Oct, 11:59PM through email to the faculty. Plagiarizing is unacceptable.