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Satyam fraud

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Satyam fraud

  1. 1. THESATYAM FRAUD<br />
  2. 2. GROUP MEMBERS<br /> SHIVANI GOHIL 03<br /> RUBY AGARWAL 24<br /> ANAGHA KALAMKAR 17<br /> BHAKTI SUKHTHANKAR 49<br /> SAYALI MANJREKAR 26<br /> PRATIKSHA MANGAOKAR 25<br />
  3. 3. introduction<br /><ul><li>It was found in 1987 by B.Ramalinga Raju.
  4. 4. location.
  5. 5. Board of directors.
  6. 6. service offered
  7. 7. Conversion into public </li></ul>company.<br />
  8. 8. <ul><li>Satyam network
  9. 9. Satyam employers
  10. 10. 1st internet service </li></ul> provider<br />
  11. 11. achievements<br /><ul><li>2007:- Becomes the 1st Asian company to features in the training magazine’s list of top 125 companies for learning.
  12. 12. 2008:-won corporate governance (including Golden Global Award twice).</li></li></ul><li>How did it happened?<br /><ul><li>Floated two other companies for their own purpose .
  13. 13. Without taking permission of the shareholders.
  14. 14. Failed to repay the loans.
  15. 15. Transfer of money.</li></li></ul><li><ul><li>Satyam computers were banned.
  16. 16. Sold of shares.
  17. 17. Resignation by Ramalinga.</li></li></ul><li>Understanding the scam!<br /><ul><li>The Balance sheet as of September 30, 2008 showed-
  18. 18. Inflated (non-existent) cash and bank balances of Rs. 5040 cRore (as against Rs. 5312 core reflected in the books)
  19. 19. An accrued interest of Rs. 376 cRore which is non-existent
  20. 20. An understated liability of Rs.1230 cRore on account of funds arranged by BR RAJU.</li></li></ul><li>fraud<br /><ul><li>An overstated debtors position of Rs. 490 cRore (as against Rs. 2651 cRore reflected in the books)
  21. 21. For the second quarter satyam reported a revenue of Rs.2700 cRore and an operating margin of Rs.649crore (24% of revenues)
  22. 22. As against actual revenue of Rs.2112 crore and an actual operating margin of Rs.61 crore (3% of revenues)
  23. 23. This has resulted in artificial cash and bank balances going up by Rs. 588 crore in Q2 alone.</li></li></ul><li>The following action has been made…<br />
  24. 24. CONFESSION<br />JANUARY 7TH, 2009<br />“ IT WAS LIKE RIDING A TIGER , NOT KNOWING HOW TO GET OFF WITHOUT BEING EATEN “<br />
  25. 25. LETTER RAJU WROTE TO THE SATYAM BOARD <br /><ul><li>FOLLOWING IS THE TEXT OF THE LETTER :-
  26. 26. BALANCE SHEET AS ON 30TH SEPTEMBER 08
  27. 27. FOR SEPTEMBER QUARTER (Q2) REVENUE AND OPERATING MARGIN
  28. 28. ARTIFICIAL CASH AND BANK BALANCE GOING UP BY RS 588 CRORES IN Q2 ALONE
  29. 29. EVERY ATTEMPT TO ELIMINATE THE GAP FAILED
  30. 30. THE ABORTED MAYTAS ACQUISITION DEAL</li></li></ul><li>R. RAJU FURTHER MENTIONED THAT :-<br /><ul><li>SHARES WERE NOT SOLD IN THE LAST 8 YEARS
  31. 31. NET AMOUNT OF RS 1230 CRORE WAS ARRANGED TO SATYAM IN THE LAST 2 YEARS
  32. 32. NOT TAKEN EVEN ONE RUPEE/ DOLLAR
  33. 33. NONE OF THE BOARD AND THE FAMILY HAD KNOWLEDGE
  34. 34. TASK FORCE HAS BEEN MADE
  35. 35. APOLOGISED</li></li></ul><li><ul><li>RESIGNED AS THE CHAIRMAN
  36. 36. PREPARED TO FACE CONSEQUENCES
  37. 37. COPIES MARKED TO SEBI AND STOCK EXCHANGE</li></li></ul><li>CONSEQUENCE AFTER CONFESSION<br /><ul><li>Investors- Panicked as Stock plummeted & Class action suits filed.
  38. 38. Employees- stranded in many ways- morally, financially, legally and socially.
  39. 39. Customers- shocked and worried about the project continuity, confidentiality and cost over run.
  40. 40. Bankers - concerned about recovery of financial and non-financial exposure and recalled facilities.</li></li></ul><li>IMPACT ON STOCK MARKET<br /><ul><li>THE SHARE PRICE OF SATYAM WAS FALL DOWN TO 21.3%.
  41. 41. The benchmark Sensex slipped over to 7% on 7 January 2009.
  42. 42. Satyam stock is being removed from its S&P CNX Nifty 50-share index .
  43. 43. Satyam’s largest shareholder, Aberdeen AMC, dumped the tainted software entity’s shares.</li></li></ul><li>Acquisition by Mahindra group<br /><ul><li>ALL WELL THAT’S END WELL
  44. 44. Anand Mahindra – New owner of Satyam
  45. 45. Post Rs2890 Crore as takeover</li></li></ul><li><ul><li> On 13th Apr 2009, via formal public auction process, 46% stake in Satyam was purchase by Mahindra.
  46. 46. July 2009, Satyam rebranded its service as “Mahindra Satyam”.</li></li></ul><li>Restatement of Result<br /><ul><li>Satyam Computer Service Restated its financial Result for the period 2002 to 2008</li></li></ul><li>Thank you<br />

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