Satyam Scandal

By Lyann Cruz…
 What is Satyam?

• Satyam Computer Services Ltd provides

solutions and services in the information,
communications and technology
industry.
• It has principal offices in India, the
United States, the United Kingdom,
Germany, Canada, Australia, Singapore,
Malaysia, Philippines and Brazil, among
others.
What happened

• The scandal broke in 2009 when founder-

chairman of Satyam Computers Ramalinga Raju
wrote a letter to the Securities and Exchange
Board of India (SEBI) and his company’s
shareholders, admitting that he had
manipulated the company’s earnings, and fooled
investors. Nearly $1 billion—or 94% of the cash
—on the books was fictitious.
Main players

• B. Ramalinga Raju
• His brother and Satyam's former managing director B. Rama Raju
• former chief financial officer Vadlamani Srinivas
• former PwC auditors Subramani Gopalakrishnan and T Srinivas
• Raju's brother B Suryanarayana Raju
• Former employees G. Ramakrishna, D. Venkatpathi Raju and Ch Srisailam
• Satyam's former internal chief auditor V.S. Prabhakar Gupta
How did they do it?

• Raju manipulated the books so that it

appeared a far bigger enterprise than it
actually was by sewing up deals with
fictitious clients and had large teams
working on these fictitious projects.
• Through fictitious Debtors, money received
from clients is created and a fictitious
payroll (a.k.a ghost employees) showing
payment of salary to them is employed.
How they were caught

• Satyam was barred from doing business with the

World Bank for eight years. The World Bank alleges
that Satyam was involved in data thefts and staff
bribery. Satyam employees receive a letter from Raju
admitting to the fraud, following which he resigns as
chairman.
• Raju and his younger brother B Rama Raju are
arrested by police, while the Indian government steps
in and disbands Satyam board.
Penalties and consequences
Fun Fact