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Satyam scam
 

Satyam scam

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This ppt contain all the information about satyam scam done by ramlingan raju and others...

This ppt contain all the information about satyam scam done by ramlingan raju and others...

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  • SCAM
  • Set up in the year 1987 by B.RamalingaRaju.India’s 4th biggest software company.The company was promoted by 2 brothers B Rama Raju and B RamalingaRaju.On 26th August, 1991 it was converted into a Public Limited Company and went for PUBLIC ISSUE in 1992.BSE IPO oversubscribed 17 times when made public.
  • It is listed in BSE, NSE, NYSE and Euronext (Amsterdam). The company employs 53,000 IT professionals across development centers in 6 continents.It serves over 654 global companies, 185 of which are Fortune 500 corporations.  
  • Satyam Computers had on  December 16, 2008,  announced that it will acquire two group firms owned by Chairman RamalingaRaju's sons - Maytas properties and Maytas Infra. The BOD of Satyam had approved the founder’s proposal to buy 51 per cent stake in Maytas Infrastructure and 100 % in Maytas Properties. The total outflow for both the acquisitions was expected to be US$ 1.6 billion comprising of US$ 1.3 billion for the 100% stake in Maytas Properties and US$ 0.3 billion for the 51% stake in Maytas Infra.
  • Upaid then filed a lawsuit in a Texas court in 2007 alleging that Satyam provided forged documents to Upaid in patents filing that eventually resulted in the company losing its patents infringement case against telecom giants Qualcomm and Verizon.
  • DSP Merrill Lynch informed SEBI about Material irregularities in Accounts on 6th JanMinutes of Meeting of 16th December,2008 were not submitted to RoC-(This created some doubts)Hearing of Upaid- satyam case on 8th Jan at the US court
  • Investors have lost a whopping Rs 13,600 crore ($2.82 billion) in Satyam[Get Quote] shares in less than a month, since the skeletons started tumbling out of the company's cupboards.The market capitalisation of Satyam fell to Rs 1,607.04 crore (Rs 16.07 billion) on Friday from Rs 15,262 crore (Rs 152.62 billion) at the end of trade on December 16, 2008, the day when Satyam announced an $1.6 billion acquisition deal of two firms promoted by the kin of IT firm's former chairman Ramalinga Raju. However, the company aborted the deal hours later after the investors dissent.The meltdown in the scrip wiped off as much as Rs 13,655 crore (Rs 136.55 billion) in just 19 trading sessions.The share price of Satyam plunged to Rs 23 on Friday from over Rs 200 levels on December 16, when the fiasco began. Investors received a rude shock on January 7, when Ramalinga Raju tendered his resignation and confessed to close to Rs 7,800 crore (Rs 78 billion) accounting fraud in the company. The stock had nosedived close to 80 per cent to Rs 39.95 after the starking revelations on that day.The major erosion in the market cap was suffered in the past two trading sessions which wiped off Rs 10,460 crore (Rs 104.6 billion) with the scrip plunging as much as 86 per cent since January 7.Analysts believe the scrip is likely to stagnate at Rs 20 levels even as the Satyam counter was among the most traded on the bourses."The scrip is stagnating at Rs 20 levels. But we cannot fix the valuation of the company based on the current price movement. The scrip is more of news report driven and struggling to find some ground," SMC global vice president Rajesh Jain said.Interestingly, Satyam shares had gained a combined 23 per cent in six consecutive trading sessions between December 26 and January 1, amid reports that the firm was ripe takeover target for rival IT firms and private equity investors.The stock had also gained after the company announced that the board would consider a buyback of shares in its meeting scheduled for December 29.However, the company had postponed the board meeting to January 10.
  • But once MrRaju sold shares to the Indian public in 1992 and later, went for a New York listing in 2001, pressure grew on him to improve the company's performance. Ever competitive, he was also in a rush to catch the market leaders, Tata Consultancy Services, Infosys Technologies and Wipro. Raju was obsessed with getting past the billion-dollar sales mark. When he got there, he wanted to post US$2 billion. Satyam posted US$2.1 billion (S$3.1 billion) sales in the year to March 31; 2008.With the ever-rising pressure to perform, Satyam began doctoring the books to show bigger profits by manipulating the balance sheet, a process that began several years back.
  • News of what is possibly the country's biggest corporate fraud, sent the indices tumbling. The benchmark Sensex slipped over 7%on Wednesday, 7 January 09. Companies perceived to have poor corporate governance standards were most affected.The company’s share price has fallen 21.3 per cent since December 15, the day before the crisis broke.
  • Liquidating assets and bringing in new investors aresome of the measures on cards with the board torescue Satyam.• As a part of high profile restructuring, DELOITTEand KPMG has been appointed as independentauditors to help restate the company’s financialreports.• The government superseded the board of Satyamand decided to appoint 10 nominee-directors.The new board will take a decision on a newmanagement team.

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