Satyam Scam

www.rvmfinishingschool.com

Presented by:Mayank SethGurbhakshish Singh

Submitted To : RVM Finishingschool.comwww.rvmfinishingschool.com +91-9550812083

http://www.rvmfinishingschool.com/


CONTENTS

1. INTRODUCTION2. BUSINESS OPERATIONS3. OVERVIEW OF SCAM4. FACES BEHIND THE SCAM5. IMMEDIATE MARKET REACTION6. OVERALL IMPACT ON MARKET7. ACQUISITION BY MAHINDRA


INTRODUCTION

1987

•Satyam computers was founded by Ramalinga Raju

•He started the Satyam computers with 20 employees

1991

•Converted into Public Ltd Co. and listed in BSE, NSE

•First Indian company to be listed in three international exchanges NYSE,DOWJONES & EURONEXT

2000

•Declared one of the 100 most pioneering technology companies by World Economic Forum

2007

•Become the 1st Asian company to features in the training magazine’s list of top 125 companies for learning

2008

•4th

fastest growing IT company in India

•Satyam network covers 66 countries and 53,000 employees across the globe

Source: Google, Slide Share


BUSINESS OPERATIONS

IT

HEALTH CARE

AUTOMOTIVE TELECOM & MEDIA

BANKING & FINANCE

BIO-TECH

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

OPERATIONS MAJOR CLIENTS



OVERVIEW OF SCAM

The figures came into picture of Satyam scam are: Inflated ( non-existent) Cash and Bank balance of

Rs. 5,040 crores(as against INR 5361 crore reflected in the books)

An accrued interest of Rs. 376 crore which is non-existent.

An understated liability of Rs. 1,230 crore. An over stated debtors position of Rs. 490 crore(as

against 2651 reflected in the books.)

It was scandalous morning of India and global economy on 7th jan,2009 when the news came in the market of Satyam scandal. The founder member of Satyam Mr. Ramalinga Raju confesses about manipulating the financial statements of the company. The revenue made by the company were overstated.

Actual number of employees is only 40,000 and not 53,000 and Mr. Raju had been allegedly withdrawing INR 20 crore rupees every month for paying these 13,000 non-existent employees.



Maytas is a reverse name of Satyam, is a company owned by “Raju’s Sons” Maytas infra

Maytas properties Satyam planned to buy Maytas to fill the gap in the Balance Sheet Floated two other companies for their own purpose Without taking permission of the shareholders. Failed to repay the loan & transfer of money Funds from Satyam were diverted to Maytas



FACES BEHIND THE SCAMRamalinga Raju • Satyam Founder & Chairman

B Rama Raju • Managing Director (Brother of Ramalinga

Raju )

V Srinivas • Ex-Chief Financial officer

S Gopalakrishnan• Price Waterhouse Auditor

Talluri Srinivas• Price Waterhouse Auditor



IMMEDIATE MARKET REACTION


• NSE fell by 192.40 points , i.e. around 6.18%


OVERALL IMPACT ON MARKET

Before the

scandal it’s share price was Rs 300 on Oct 2008 & just after this scandal the share price went down to Rs 6.30

STOCK MARKET SHARE HOLDERS EMPLOYEES INDIAN ECONOMY

Due to a downfall in market shareholder loses Rs.9374 crore a day.

Jobs of over 50,000 technocrats were at risk

The GDP fell by 0.4% & the Indian economy fell dramatically



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.


Satyam Scam

Economy & Finance

Transcript of Satyam Scam