SATYAM

SCANDAL
financial scam involving over Rs. 7800 crore

Avadhi Tongia
Dr. Gunjan Anand Rakesh Maheshwari
Shaurya Bansal
Tanish Singhai
Yash Nahar
 About Business Operations
Satyam Computers • Satyam computers is an Indian multinational
provider of Information Technology (IT),
Networking Technology Solutions and Business
Support Services (BPO) to the telecommunications
industry.

• It is headquartered at Mumbai, India.

• The company offers consulting and information

technology services spanning various sectors like
software development, outsourcing, CRM &
consulting.

• As per the advanced technology system, Satyam

technologies were used in all parts of industries.
Timeline of the scam
• Satyam Computers was founded by Ramalinga
1987 Raju

• He started the Satyam computers with 20

employees

• First Indian company to be listed in three

international exchanges NYSE,DOWJONES &
1991 EURONEXT

• Listed in BSE
Timeline of the scam

• Declared one of the 100 most pioneering

technology companies by World Economic
2000 Forum

• Satyam Computers had announced the

acquisition of a 100 percent share in Maytas
Properties and Maytas Infra which is a real
2008 estate comapny with the name of their own
family members and friends.

• Satyam’s stock dropped 55% in trade on the

New York Stock Exchange.
People involved in scam

Ramalinga Raju B Rama Raju V Srinivas

Satyam Founder & Chairman Brother of Ramalinga Raju, Former Ex-Chief Financial Officer
MD
People involved in scam

S. Gopalkrishnan Talluri Srinivas

Price Waterhouse Auditor Price Waterhouse Auditor
 About the SCAM
Ramalinga Raju aggressively buying Real Estate Properties in Hyderabad or different other regions.

They took loan with the name of Satyam Computers by creating

FAKE sales invoices and showing FAKE profits in their financial
statement.

350 Fake Companies was registered and he was buying properties on the
name of their own relatives and family members.

He was trying to pull investors with fake profits and they were selling these stakes in the
company.

He got a insight of metro route of Hyderabad and he was buying properties near the route.
 About the SCAM
After that raju thought he would sell all the properties later at higher rates and would fill the gap between
actual and fake profit, but in 2008 because of recession the real estate business went to down.

So Raju made a new plan that they will buy Maytas Infra and Maytas property which was his own
company and would fill the gap between the profits without actual cash transaction.

After the decision of buying Maytas, there was a drastic fall in the share price of Satyam
Computers, after this Raju Cancelled the plan of buying Maytas.

After that in the year 2009, Raju confessed in SEBI that Satyam Computers is inflating their
financial statement from past couple of years.
Financial Statement Year 2008-09 (Q2)
 Impact of this 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.

• 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.

STEPS TAKEN AFTER
SATYAM SCAM
• Introduction of new rules by the market
regulator, making it compulsory for promotors
of companies to disclose the percentage of
shares pledge by them to lenders.

• Appointment of independent auditors &

company secretary by Company Law Board to
conduct Audit of any private organization and
time.

• Set-up of 5 member committee to suggest how

to implement effective compliance and
corporate governance in private sector by CLB.
ACQUISITION BY MAHINDRA
• Tech Mahindra acquired 46% stake in
Satyam by formal public auction process
on April 13,2009.

• On July 2009, Satyam rebranded its

services as “Mahindra Satyam”.

• Tech Mahindra merged with Satyam itself

to create nation's fifth largest software
services company with a turnover of $2.7
billion.