Satyam should wind up or notPresentation Transcript
SATYAM SHOULD WIND UP NOW OR NOT ?
Understanding the Scam
Global IT solution provider, consulting, BPO services and many other.
Approximately 690 Active Customer.
BUSINESS CUSTOMER PROFILE
Approximately 53000 employees.
Operation in more than 65 countries,
Development centers located in 28 cities in 14 countries.
EMPLOYEES GLOBAL PRESENCE
Low cost operation.
UNDERSTANDING THE SCAM
Raju Raju sat on the wall Raju Raju had a great fall Balance sheet died, Shareholders cried Raju Raju made a fraud Raju Raju Yes baba Cheating us No baba Telling lies No baba Open the balance sheet HA! HA! HA!
For a layman , one can understand the reason as only sheer pressure to be in top 10 companies in order to bag orders from Fortune 500 companies. For this, Raju showed wrong figures, inflated profits and huge cash flow in his company. When he sensed that his company may be overtaken by some big company and they will ask for the balance sheets and facts.. he himself disclosed everything and left the company...
Satyam Computer Services ltd. BALANCE SHEET PARTICULARS As On 30.09.2008 Adjustment Adjusted Balance Sheet Source Of Funds 1. Shareholder’s Funds a) Share capital 134.70 134.70 b) Allotment 2.76 2.76 c) Reserve and Surplus 8392.23 (415.47) 8529.69 (278.01) 2. Loan Funds a) Secured Loans 30.49 30.49 b) Unsecured Loans 234.80 1230.00 1464.80 8794.98 1217.28
Cont… Applications Of Funds: 1.Fixed Assets a)Gross Block 2173.91 2173.91 b) Less; Depreciation 1158.13 1158.13 c) Net Block 1015.78 1015.78 d) Capital W.I.P 365.32 365.32 1381.10 1381.10 2. Investments 618.64 618.64 3. Deferred Tax Assets (net) 118.75 118.75
Cont… 4. Current assets a)Sundry debtors 2651.36 (2161.36) 490.00 b)cash and bank balances 5132.62 (5040.00) 272.62 c)other current assets 376.34 (376.34) d)loans and advances 502.22 502.22 8842.54 1264.84
Cont… Less: Current Liabilities and provisions a) Liabilities 1669.26 1669.26 b) Provisions 496.79 496.79 2165.05 2166.05 Net Current asset 6676.49 (901.21) 8794.98 1217.28
2. The profit margins were as low as 3% as declared by Chairman in his letter to the Board.
3. Maximize the returns of the stakeholders
4. High interest of Promoter family in the company & hence to protect it from being taken over.
Maytas was a company owned by the Raju Family with a majority stake of 36%
Chairman of Satyam, B.R. Raju proposed to purchase maytas for cash.
B.R. Raju proposed the deal with an intention to Cover up the inflated cash balance.
The investor objected the deal as entire cash of Satyam was being transferred to promoters through Maytas.
B.R. Raju called of the deal to avoid getting caught and being exploited.
Under the companies act, if you present fraudulent accounts to shareholders, then in itself is an offence but the amount of publishment is not as severe as under SEBI’s Law.
Under the IPC this is cheating under section 420 and that could involve atleast 7 years imprisonment.
It’s criminal offence under section 24 of the SEBI Act and could mean penalty and imprisonment of upto 10 years.
The audit company, Price Water House Coopers, which was supposed to pay a sum of rs. 5 lakh.
SATYAM SHOULD WIND UP NOW OR NOT ?
It worked very hard to gain the confidence of global corporations who have entrusted their engineering and mission critical operations with Indian companies.
It always made a great contribution in Indian IT sector as well as it was always helpful for the economy.
if we take a look at the ongoing project works of Satyam we surely come to know that those projects are good and successful, if they are brought to the completion
4) With new and honest people working in the company under a proper observation, the company can be proved as an asset for the nation.
5) If we look back at the track records of the company before the scam, the project works done are very good and are really bankable.
Now at last we can conclude that “the government can use SATYAM as an example to make companies absolutely transparent”.