Satyam Scandal and Corporate Governance

Created by: Karan.S.Sahni PGPM-0810-07 International Academy of management & Entrepreneurship

Agenda

Introduction to satyam Ramalinga Raju Scandal(SATYAM-ASATYAM) corporate Governance

…with a presence across the globe
20 development centers spread across the globe. Operations in 55 countries, 6 continents

A Pioneer…
Pioneered delivery of offshore service (John Deere & Co.) First Indian Co. to set-up dedicated satellite link First IT company to get ITAA certification Set-up India’s first private ISP – SIFY Among world’s first 10 companies to get SEI-CMM Level 5 assessment Forming Alliances with best of breed technology vendors very early on Adoption of Verticalization and a customer-centric organizational Structure Pioneered ITES quality framework – eSCM Among the first to be certified under BS 7799 for ISMS First & only Lead Auditor for eSCM

…providing end-to-end services
Strategic IT Consulting Product Development Services Embedded SystemsRobotics Chip Design R&D Services Enterprise Application Deployment and Integration Data Warehousing Business Intelligence SCMCRM Knowledge Management

Managed IT Services

Software Development & Maintenance

Business Process Outsourcing

…and trusted by
Ø 8 of the top 10 Auto majors Ø 7 of the top 10 Electronics and Electrical Equipment Manufacturers Ø 6 of the top 10 Pharmaceutical companies Ø 4 of the top 5 Networking and Other Communication Equipment Manufacturers Ø 3 of the top 5 Healthcare companies Ø 2 of the top 5 Securities companies

About Ramalinga Raju
Ramalinga Raju born on 16th sep,1954 in a family of farmers In Bhimavaram town of Andhra Pradesh He was an average student in class He completed his (B. Com) degree in 1975 from Andhra Loyola College at Vijayawada Raju's father, was one of the first farmers to start commercial grape production in Hyderabad. The agribusiness' profits also went a long way in educating Ramalinga, the eldest son. He did his MBA from Ohio University, USA.

SATYAM-ASATYAM
• The satyam scandal broke when INDIA was getting its 1st hard knocks from the global slowdown
Ø Raju confessed that Satyam's balance sheet of 30 September 2008 contained:
• • • • Inflated figures for cash and bank balances of INR 5,040 crore (as against INR 5,361 crore reflected in the books). An accrued interest of INR 376 crore which was non-existent. An understated liability of INR 1,230 crore on account of funds was arranged by himself. An overstated debtors' position of INR 490 crore (as against INR 2,651 crore in the books).

CORPORATE GOVERNANCE
• • • • Corporate governance basically refers to a set of systems and subsystems by which a company is controlled and directed. Corporate governance appears to be ineffective in India in certain cases and it is no surprise when it comes to Satyam episode. The emphasis of corporate governance should be on economic efficiency, that is, creation and enhancement of value for shareholders. Hallmark of good corporate governance It is transparent and effective. It is able to prevent corporate crimes. It seeks to maximize the long run corporate value. It is ethical and socially responsible.

Thank You

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