Satyam Company Services Ltd. was incorporated on June 24, 1987
Main business of the company was IT related fields and it came into prominence after Y2K problem
Company was listed in Bombay Stock Exchange in 1992
Company bags its first fortune 500 client John Deere & Co
Listing in NASDAQ, New York Stock Exchange and EURONEXT
Current revenue: 1.24 billion USD
Was acquired by Mahindra group in June 2009 and renamed as Mahindra Satyam
HOW IT HAPPENED Maytas Acquisition. E-mail dated 18.12.2008 from Joe Abraham to Mr. Krishna G. Palepu and circulated to other Board Members wherein misdeed of the chairman/company was narrated HemantKothari, Non Executive Chairman of DSP, Merril Lynch Ltd. after having discussion with B. RamalingaRaju forced him to confess. Investors Aborted. Board Members Resigned. On 7th Jan., 09, Chairman resigned after announced involvement in fraud.
FACTS AND FIGURES Inflated figures for cash and bank balances of INR 5,040 cr. (as against INR 5,361 crore reflected in the books). Operating Profit were artificially boosted from the actual 61 cr. to 649 cr. Satyam also showed an interest earning of Rs. 376 cr. that was fictitious.
Area covered for investigation
Cash and bank balances
Role of Statutory Auditors
Role of Internal Auditors
Board of Directors
Purchase of land
Floatation of 327 companies
Income Tax Liability
IMPACT ON INDIAN IT INDUSTRY It is surely going to be more difficult for other Indian IT service players to win business. Undoubtedly, this is going to hurt the prospects of foreign money flowing into India. Global perception about indian companies. Indian stock market slipped over 7% on 7th Jan., 09.
INDIA’S STEP TO SAVE SATYAM The Indian Government has stated that it may provide temporary direct or indirect liquidity support to the company Govt. has appointed new board of members for Satyam consisting of heavy weights from India's corporate sector. Satyam is seeking bank loans to help cover salaries and other operating expenses