Satyam Scandal

 Founded in 1987 by B. Ramalinga Raju in Hyderabad

 information technology, business services, computer software, and is a
leading outsourcing company in India
 initial public offering on the Bombay Stock Exchange in 1991
 4th largest Software exporter
 Satyam employed nearly 50,000 employees and operated in 67 countries
 World Council for Corporate Governance awarded Satyam with the
"Global Peacock Award" for global excellence in corporate
accountability
 Also listed in NYSE
 Ernst & Young awarded Mr. Raju with the Entrepreneur of the Year
award
 example of India's growing success
 Problem Arises………
 Formed Maytas infra & Mytas properties
 To fund this manipulation of Financial Statement of Satyam Computers
 Fake Liability And Asset, 7561 fake invoices, false bank Statements
 Created 13000 false salary Accounts and withdraw Rs.20 crores every
month
 Increase in Share price
 Raju’s Stack decreases from 15.6% to 2.6% in 3 years
 2008 recession bring down prices of Real estate
 To fill the gap it is decided to acquire the 100% share of Maytas properties
& 51% share of Maytas infra
 Board of Director Agreed but Shareholders and institutional investors
didn’t agree
 Shrinivas valdamani (CFO) & Some executive Sold their Shares

&& Last Chance of survival also goes down………..

Consequences
 7th Jan 2009-Confess to the SEBI
 Share price drop from Rs.170 to 6.50 causing investor loss of Rs.14162
crores
 NYSE stock prices fall by 55%
 Institutional investor LIC lost Rs. 950 crores
 9th jan 2009-stock removed from BSE & NSE
 Auditors PWC(Price Waterhouse Cooper) banned by 2 yrs by SEBI and
fined 13 cr. By SEC
 10 apr 2015-Raju & brother with 3 others were arrested in the charge of
Money Laundering, Insider Trading & accounting Fraud
 SEBI asked SATYAM to return Rs. 1850 cr with 12% interest
 Apr 2009-Tech Mahindra purchase 51% stack & named it as Mahindra
Satyam & in june 2013 it merged with Tech Mahindra