scam

2. INTRODUCTION
1. Satyam computers was founded in 1987.
2. The company offers consulting and information technology
services across various sectors.
3. Satyam’s network covers 66 countries and 53,000 employees across
six continents.
4. It is listed in BSE, NSE, NYSE.
5. It converted into Public Ltd. Co. in 1992.
6. Mahindra Satyam is overall ranked #153 by Fortune India 500 in
2011.

3. THE SCAM
1. The chairman of Satyam, Ramalinga Raju charged against the
accusation for offences of criminal conspiracy, cheating, forgery,
and falsification of accounts.
2. Mislead various investors.
3. Used dummy accounts to trade in Satyam’s shares.
4. On 22nd Jan 2009, CID told in court that the actual no. of
employees is only 40,000 not 53,000 and that Mr. Raju had been
allegedly withdrawing 20 crore rupees every month for paying
these 13,000 non existent employees.
5. Used the funds of the investors for family business. There were
allegations that funds from Satyam were diverted to MAYTAS.

4. WHAT WENT WRONG
1. Inflated figures for cash and bank balances of INR 5040 crore were
reflected as 5361 crores.
2. Operating Profit were artificially boosted from the actual 61 cr. to
649 cr.
3. Satyam also showed a fictitious interest earning of Rs.376 cr.

5. SATYAM SHARES
 Biggest single day fall for a stock in stock market of Rs.175
 BSE Sensex fell by 749.05 i.e. 7.25%
 NSE fell by 192.40 points i.e. 6.18%
 Companies worth reduces from 11,464 crore to 1,607 crore.
 All time low of Rs.11.50 on 9th Jan compared to highest of Rs.524.90
IMMEDIATE MARKET REACTION:
 Sensex stock index dropped 7.3%
 Satyam shares fell nearly 78%
77%

6. CONSEQUENCES
 Before the Scandal its share price was Rs.300 in oct.2008. after the
scandal its share price goes down to Rs.6.30
 On 10th Jan 2009 the Company Law Board decided to bar the
current board of Satyam from functioning.
 Bank of America and State Farm Insurance terminated its
engagement with the company.
 Hurt the prospectus of Foreign money flowing into India.
 Global perception about the Indian Companies.
 Jobs of over 50,000 technocrats were at risk. The GDP fell by 4%.

7. ACQUISITION OF SATYAM

8. CONCLUSION
More scandals like Satyam can be avoided if:
1) If auditing firm is honest.
2) SEBI plays an active role.
3) Periodic review of legal compliance reports by independent
directors.

9. THANK YOU
Presented By –
1.) SANKALP RAJORIA
2.) JAGDEEP DHAKA
3.) NISHANT KR. NAYAK
4.) NIRANJAN MEENA
5.) RAMPRATAP