Satyam scam- A major unethical practice in india

Unethical practice

1. WHITE COLLAR SCAM WITH RESPECT TO CORPORATE GOVERNANCE FAILURE @ SATYAM

2. SL.NO CONTENT 1. BACKGROUND 2. PEOPLE BEHIND THE SCAM 3. THE RISE OF SATYAM 4. ACHIEVEMENTS 5. THE SCAM 6. CONFESSION 7. HOW DID IT HAPPEN? 8. CONSEQUENCES 9. ACTION TAKEN 10. IMPACT 11. PROBALE REASONS 12. SATYAM NOW 13. CONCLUSION CONTENT

3. BACKGROUND BORN FAMILY EDUCATION

4. PEOPLE BEHIND THE SCAM BYYRAJU RAMALINGA RAJU B. RAMA RAJU V.SRINIVAS S.GOPALAKRISHNAN TALLURI SRINIVAS

5. THE RISE OF SATYAM

6. HOW DID IT HAPPEN? Floated 375 companies for his own purpose Non acceptance with regard to decisions from shareholders Mislead various investors Used dummy accounts to trade shares Funds from Satyam was diverted to Maytas Insider trading Falsification of number of employees Ten imaginary fixed deposits

7. Previous records Getting third party evidence Factors overlooked PWC REASONS FOR SCAM WEAK CORPORATE GOVERNANCE DUBIOUS ROLE OF INDEPENDENT DIRECTOR FAILURE AT ALL 3 LEVELS OF AUDITING

8. CONFESSION JANUARY 7 TH 2009, “it was like a riding a tiger, not knowing how to get off without being eaten”

9. WHY DID HE CONFESS? The gap in the balance sheet reached unmanageable proportions and could not be filled anyhow in future The whistle blower whose email to a Satyam board member triggered a chain of events.

10. PROBABLE REASONS Growing competition Threat of being overtaken PRESSURE TO MEET EXPECTATIONS On his ability OVER CONFIDENCE Siphoning of funds Salary of non existent 13000 employees PERSONAL BENEFITS

11. ACTION TAKEN New board of directors were appointed. Disclosure of pledged securities. Increased financial accounting disclosure. Adoption of international standards. Creation of new corporate code of conduct . - STEPS TAKEN BY MINISTRY OF CORPORATE AFFAIRS ICAI

12. CONSEQUENCES

13. IMPACT OF THE SCAM ON SOCIETY Jobs of over 50000 technocrats were at risk The GDP fell by 0.4% IT sector suffered a downturn Country’s booming economy was at risk India’s global image was tarnished India’s stock market fell dramatically

14. SOCIETY’S REACTION The people of his village hailed the development works undertaken by Raju foundation The citizens for a better public transport in Hyderabad(CBPTH) demanded a CBI enquiry into the process of how Maytas bagged the Hyderabad metro rail project Analysts of India have termed the Satyam Scandal as India’s own Enron scandal

15. SATYAM NOW On 13 th April 2009, Tech Mahindra wins bid for Satyam acquisition via formal public auction process, 46% stake in Satyam was purchased by Mahindra. New board was appointed by government which included chairman of HDFC and former SEBI member etc., Satyam shares gained over 44% day after appointment of the new board On July 2009, satyam rebranded its service as “MAHINDRA SATYAM”

16. CONCLUSION INTERNAL MANAGEMENT SYSTEM INTERNAL AUDIT AUDIT COMMITTEES