SATYAM

COMPUTERS
SCAM
BATCH: B2

SAYEE PENDKAR 2021200092

MALAY PHADKE 2021200093

MAYURESH PITALE 2021200094

DIVESH PODAR 2021200095

SHRUTI PRAHBU 2021200096

ANKIT PRASAD 2021200097

PRANAV RAINA 2021200098

CONTENT
• Introduction
• Rise of Satyam Computers
• What was the biggest corporate scam in India about?
• People behind the scam
• Impact of Satyam Scam
• Government Intervention and Regulatory Measures
• CBI Raid, Confessions and Imprisonment
• Mahindra Satyam
INTRODUCTION

Satyam Computers was founded in 24th June, 1987.

They initially provided Software Development and Consultancy Services to large

corporations.

The company was founded by the brothers B Rama Raju and B Ramalinga Raju.

It converted into Public Ltd Co. in 1992.

Ramalinga Raju was its chairman until January 7, 2009 when he resigned from the Satyam
Board after admitting to corporate fraud.
RISE OF SATYAM COMPUTERS

Company set up offsite

development centers which had
high margin business and also
Satyam Computers Pvt. Ltd was Company went in for a Public ventured into the euro conversion
founded. Issue of Equity Shares. business.

1987 1992 1999

1991 1994 2000

Converted to Public Ltd. The Big Break – Allies with Dun Dataquest IT Man of The Year
Company. and Bradstreet Corp. Declared Award
one of the 100 most pioneering
technology companies by World
Economic Forum.
THE SATYAM
COMPUTERS SCAM
• Raju and his brother had mislead various investors.
• They had also used dummy accounts to trade in Satyam’s shares.
• Raju also violated the insider trading norm.
• Funds from Satyam were diverted to Maytas Infra and Real estate
Developers.
• Operating profit were artificially boosted from the actual 61 Cr. to
649 Cr.
• Satyam also showed an interest earning of Rs. 376 Cr. that was
fictious.
• On 22nd January 2009, CID told in the court that the actual number
of employees is only 40,000 and not 53,000 reported earlier.
• Also that Mr. Raju had been allegedly withdrawing Rs. 20 Cr. for
paying these non-existent 13,000 employees.
PEOPLE BEHIND THE SCAM
• Ramalinga Raju: Satyam Former Chairman
• B Rama Raju: Brother of Ramalinga Raju,
Former Managing Director
• V Srinivas: Ex-Chief Financial Officer
• S Gopalkrishnan: Price Waterhouse Auditor
• Talluri Srinivas: Price Waterhouse Auditor

• PwC was the external auditors to the company and it was their duty to examine the
financial records and ensure that they are accurate.
• Suspicion towards PwC was later increased when it was found out that they were
paid twice the fees for their services.
IMPACT OF THE SATYAM SCAM
IMPACT OF THE SATYAM SCAM

• Jobs of over 50000 were at risk.

• India's global image was suffered. Indian stock market fell dramatically. Biggest single day
fall of 175 on Jan 6th in Satyam share.
• The New York stock exchange halted trending in Satyam stock.
• India's National Stock Exchange announced removal of Satyam from S&P CNX & Nifty 50.
• The GDP fell by 0.4%.
• IT sector suffered a downtown.
SHARE MARKET
COLLAPSE
GOVERNMENT INTERVENTION

New Board of Increased financial

Disclosure of pledge
directors were accounting
securities.
appointed. disclosure.

Creation of new
Adoption of
corporate code of
international
conduct by Ministry
standards.
of Corporate Affairs.
REGULATORY MEASURES

Set-up of 5 member
Introduction of new rules by committee to suggest how to
Appointment of independent
the market regulator, making implement effective
auditors & company secretary
it compulsory for promotors compliance and corporate
by Company Law Board to
of companies to disclose the governance in private sector
conduct Audit of any private
percentage of shares pledge by by CLB.
organization and time.
them to lenders.
 CONFESSIONS AND ARRESTS

Ramalingam
Raju along with 2
other accused of
the scandal had
The gap in the been granted bail
“It was like The whistle
balance sheet from Supreme
riding a tiger, blower whose After coming
On January 7th, reached court on 4
not knowing email to a out, all past
2009 unmanageable November 2011
how to get off Satyam board Scams and
Ramalinga proportions as the
without being member False records
Raju confessed and could not investigation
eaten” – triggered a were came
to the scam. be filled agency CBI
Ramalinga chain of into light.
anyhow in failed to file the
Raju. events.
future. charge sheet even
after more than
33 months of
Raju been
arrested.
 On 13th April 2009, via formal public auction process, 46%
stake in Satyam was purchased by Mahindra.

Mahindra Satyam merged with Tech Mahindra on 24 June

2013.

MAHINDRA It is now formed as Tech Mahindra.

SATYAM
The shares price of Mahindra Satyam: