BUSINESS ETHICS &

GOVERNANCE
PROF. SHRUTI NAIK

MEMBERS
NAME
VARSHA
JAYALAKSHMI
KUNJAL
PRIYANKA
NISHU

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SATYAM SCAM

INTRODUCTION
FOUNDED IN 1987
CONVERTED INTO PUBLIC LTD CO.IN 1992
CHAIRMAN-B RAMALINGA RAJU
SATYAMS NETWORK COVERS 66

COUNTRIES AND 53,000 EMPLOYEES

ACROSS SIX CONTINENTS

ABOUT RAMALINGA
RAMALINGA RAJU BORN ON SEPTEMBER 16

1954
HE FOUNDED SATYAM COMPUTERS AND WAS

ITS CHAIRMAN UNTILL JANUARY 7,2009

RISE OF SATYAM
1987 : SATYAM COMPUTERS PVT.LTD
1991 : JUNE-FIRST FORTUNE 500 CLIENTS

AUGUST-CONVERTED INTO PUBLIC LTD

CORPORATION
1994 : THE BIG BREAK-ALIES WITH DUN AND

BEDSTREET CORP.
2000 : DECLARED ONE OF MOST PIONEERING

TECH
COMPANIES BY WORLD ECONOMIC
FORUM

HISTORY
1st BUSINESSMAN IN THE FIELD OF

CONSTRUCTION AND TEXTILES

RAJU FOUNDED SATYAM IN 1987
STARTED WITH 20 EMPLOYEES IN 1987
IN SEPTEMBER 2008 THERE WERE

52,000 EMPLOYEES WORKING IN

SATYAM

ACHEIVEMENTS/AWARDS
ERNST AND YOUNG ENTREPRENEUR OF THE

YEAR SERVICES AWARD 1999

ASIA BUSINESSMAN LEADER AWARD 2002
RANKED AMONG INDIAS TOP 10

EMPLOYERS,2004 AND 2003

SAP PINNACLE AWARD 2008

What is the Satyam scam all

about?
It is about corporate governance and fraudulent
auditing practices.
The company misrepresented its accounts.
It is a fraud, which misled the market and other
stakeholders.
Even basic facts such as revenues, operating
profits, interest liabilities and cash balances were

3 Terms used for the Satyam

Scam

Manipulation of Financial Statements

Masterminds of the Scam

A special CBI court on Thursday sentenced
..
Who is to blame here ? Promoters ?
They are primary culprits.
What about auditors ?
Tasked to ensure that no financial
bungling is undertaken

CBI has filed a 300-page charge sheet

B Ramalinga Raju & his brother
Satyam's former managing Director : B.
Rama Raju
Former PwC auditors : Subramani
Gopalabkrishnan & T Srinivas

Raju's another brother B Suryanarayana

Raju's

 Former employees G. Ramakrishna, D.

Venkatpathi Raju's & Ch Srisailam
Satyam's former internal chief auditor V.s
Prabhakar Gupta

How did the Scam take place ?

Raju wanted to take over his MATYAS INFRA

and MATYAS PROPERTIES.

He was blamed that he was using the funds of

the investors for the family business.

World bank had banned the Satyam to take

any services for 8 years

Satyam Computers had on December 16, 2008,

announced that it will acquire two groups firms

1. Matyas properties
2. Matyas infra
.The Board of Directors of Satyam had approved

the founders proposal to buy 51 % stake in Matyas

Infrastructure and 100% in Matyas properties
.The total outflow for both the acquisitions was

expected to be US$ 1.6 bn comprising of US$ 1.3

bn for the 100% stake in Matyas Properties and
US$ 0.3 bn for the 51% stake in Matyas Infra.

This is the move that sparked a row over alleged

violation of corporate governance laws.
This deal is not profitable for investors. So after this
announcement they started to raise their voices
against the deal.

SATYAM UNDER
CONSTRUCTION
Appointed new board
Board appointed by government.

Former nassoom chief Kiran Karmik,

Chairman HDFC - Deepak Parikh,

Former SEBI member C. Achuthan.

Satyam shares gained over 44% day after appointed of the

new board.

New CEO A S Murthy.

Tech Mahindra acquired Satyam on April 13,2009.
On 13th April 2009, via formal public auction process, 46%
stake in satyam was purchase by Mahindra.
July 2009, Satyam rebranded its service as MAHINDRA
SATYAM

Conclusion
More scandals like Satyam can be avoided if1. If auditing firm is honest
2. SEBI plays an active role
3. Periodic review of legal compliance reports by

independent directors.

Satyam Now
Ramalingam Raju along with 2 other

accused of the scandal, had been granted

bail from supreme court on 4th November
2011 as the investigation agency CBI failed
to file the charge sheet even after more 33
months of Raju been arrested. Appointing
new board. Board appointed by government,
Tech Mahindra wins bid for Satyam scam.

Thank You