SATYAM

COMPUTER
SCAM.
INTRODUCTION
• The company was started by two brothers, B Rama
Raju and B Ramalinga Raju in Hyderabad in 1987.

• The company dealt with the IP and computer services

sector.

• Later it became a listed company with the Bombay

Stock Exchange in 1991.

• Ramalinga took the helm as chairman in 2006

• In the years that followed, the company
was climbing the ladder of success with
Ramalinga took the helm as chairman in
2006 it looked like it was a steady, the
stock price soared and the brothers are
cashing out.
• They use this money to secure bank
loans, which afterwards they invested
in properties across the country.
HOW THEY DID THE SCAM?
•Ramalinga raju have been manipulating numbers in the balance sheets, to secure
crores of money and to inflate the value of the company allegedly.

•it's assumed that the brothers took advantage and massively increased their revenue,
again, they did this by the creation of fake balance sheets, P&L statements, and even
had fake fixed salary accounts and inflated bank statements, investors. with all of
this, their stock price just kept going up at that time.

• PricewaterhouseCoopers, were the auditors of the Satyam companies and were

supposed to verify all of these documents, but they didn’t done their job well and
around 7561 fake bills were created, and the auditor's eventually converted all of this
money into a fixed deposit account.
• According to all reports it was estimated around
5,000, crores while the company was doing well
Ramalinga took advantage in the real estate sector,
so he bought land in multiple cities during this time.
so it was where the scam began.

• since he overextended himself in buying

properties, and needed more money, he turned to
his other companies, and began manipulating the
stakeholders, investors partner companies, and
even most of his employees. But then in 2008’s
recession it went down between three and four and
a half percent generally across these markets, And
that is when everything started to unravel.
HOW THE SCAM GOT REVEALED.
The 2008 market crash is still one of the most INHUMANE in history,
it affected the world economy and led to massive losses, banks
couldn't sustain their house loans investment firms began to
crumble and stocks just started going down and companies across
the world started suffering, and Satyam with their real estate
holdings starting to deplete.

The brothers were bleeding capital, and so they were in real

trouble, as the most entrepreneurs and investors across the world,
worried about their wealth.
• So the board of directors at Satyam started demanding that the fixed
deposits be pleased, indices, safe and profitable ventures, the
brothers offered to invest in inmates, owned by their own family and
themselves. And, this didn't sit too well with the board

• At first, the Board approved the move, but then after discovering that
had incurred losses during the housing crash, they started taking a
closer look into more and more questions were asked about all
steepens invoices and the projected profits the brothers, they didn’t
even answer any questions and the board, just put in letter.

• So finally, on January 7 2009 Ramalinga Raju wrote down a five-page,

confession in which in one of those he wrote “It was like riding a tiger,
without knowing how to get down without eaten”.
• CBI investigation was conducted, and the years of fraud, due to which the
stock prices started falling on 28th October 2013 The enforcement
directorate filed the charge sheet against Raju and 212 others involved in
the scam.

• on 9th April 2015 Ramalinga Raju and his brother, was sentenced to seven
years in prison, and fined 5.5 crore rupees in January 2018
PricewaterhouseCoopers was banned from auditing listed companies in
India for two years for its alleged participation with Satyam computer
services by India's capital market regulator.

• ICCI Prudential Life Insurance suffered a loss of rupees 619.67 crore,

followed by HDFC Standard Life Insurance at 280 crores. And, of course,
that will mean the aftermath of the scam left long lasting consequences.
Precautions taken by Government
Indian Government and SEBI took various steps and made laws
improvable to assure this never happens again. The several new
regulations added under the Companies Act of 2014, semi
amended clause 49 And so companies are now required to audit
those protocols and safety measures enacted. It was one of India's
most tedious and massive scandals, which is now added into our
history as a cautionary tale for anyone who's looking to proceed.
Presented by-

Sanchay Gour
Harmeet singh khalsa
SHRUTI VISHWAKARMA
VIBHOR NIGAM
LOKESH SAHU