Satyam Fraud Case- what really happened

1. Satyam Case
Presented by –
Vinod K.N
Divyansh Jain
Pallavi Agarwal
Neema Jose
Priyanka Mishra

2. Outline of the Case
 The Satyam scandal has shaken corporate India, and damaged its
reputation with investors, domestic and foreign. It turns out that
founder and CEO B. Ramalinga Raju invented $ 1 billion in cash, which
never existed.
 False profits and cash resources were exhibited in the financial
statements to create an illusion of a highly profitable business which
duped gullible small investors. The financial manipulation had been
going for seven long years but neither the so-called “independent
directors” nor the professional auditors discovered it.
 Ramalinga Raju resigned on 7 January 2009 and confessed that he had
manipulated the accounts by US$1.47-Billion.

3. Lessons Learned from Satyam Scam
 The 2009 Satyam scandal in India highlighted the nefarious potential
of an improperly governed corporate leader.
Investigate All Inaccuracies: The fraud scheme at Satyam started very
small, eventually growing into $276 million white-elephant in the room.
Ruined Reputations-Indian rivals will come under greater scrutiny by
the regulators, investors and customers.
Corporate Governance Needs to Be Stronger: All public-companies
must be careful when selecting executives and top-level managers

4. Effects on Owner
 Imprisoned by the Hon. Court and Govt.of India.
 Reputation went down.
 Bank took over their property.
 Social boycott.

5. Stock Market
 Within hours, Satyam stocks plunged over 82%. It dragged the
benchmark Sensex index down 7.3% to close at 9,586.88 on
Wednesday.
 The New York Stock Exchange halted trading in Satyam stock. India’s
National Stock Exchange expelled Satyam from all its equity indices
and the BSE and several domestic followed the suit.

6. Effects on Company
 Non functioning of the company.
 Closure of the company – all the employees lost their jobs.
 Company was later acquired by Mahindra and now known as Tech-
Mahindra.