1. Satyam was an Indian IT services company that offered software development and other services. It was founded by Ramalinga Raju and considered a pioneer in India's IT sector. 2. In 2008, Satyam announced acquisitions that were withdrawn due to investor backlash. Raju then revealed that Satyam's financial reports had been inflated for years, including inflated cash, revenues, margins and staff numbers. 3. Weaknesses in Satyam's culture and structure, such as family control and lack of transparency between departments, contributed to the fraud going undetected for years. The board also had conflicts of interest that hindered independent oversight of the company.

1. PRESENTATION ON SATYAM CASE
BY
ASHWANI KUMAR(18MB4001)
SHREYASHI DAS(18MB4006)
ANANYA BHATTACHARYA(18MB4017)

2. ABOUT THE COMPANY “SATYAM”
• Mahindra Satyam was an Indian IT services company based in Hyderabad, India.
• It offered a range of services, such as:
• software development, system maintenance, packaged software integration
and engineering design services.
• Satyam was founded by Ramalinga Raju.
• In 2009, Satyam, was considered among the pioneers of the information technology (IT)
sector in India, with revenues of over US$2 billion.
• It was the only Indian company to be listed on three international stock exchanges.
• It had received the Golden Peacock Award for its achievements in corporate
governance.

3. SATYAM SCAM DETAILS
• In December 2008, Satyam announced acquisition of two
companies - Maytas Properties and Maytas Infrastructure
• It planned to acquire 100% and 50% stakes in Maytas
property and infra for $1.6B.
• Due to adverse reaction from institutional investors and the
stock markets, the deal was withdrawn within 12 hours.
• After the deal was aborted, four of the prominent
independent directors resigned from the board of the company.
• satyam founder Raju revealed that the revenue and profit
figures of Satyam had been inflated for past several years.

4. The following were the inflated figures:
• Inflated cash and bank balance Rs.5040cr
• Non existent accrued interest Rs376cr
• Understated liability of Rs.1230cr
• Overstated Debtor position of Rs.490cr
• Inflated staff by 12000 ( Actual were 40000)
• Revenue of Rs.2700cr (Actual were Rs.2112cr)
• Operating margin to be 6494 cr ( Actual were 61cr)

5. 1. India’s environment that investors should consider when investing in companies like Satyam.
• Satyam was an Indian IT services company based in Hyderabad, India.
• It offered a range of services, including software development, system maintenance, packaged software
integration and engineering design services.
• Investors must ensure that the share value which is listed is genuine and as per its financial status and must
ensure that the due diligence should be done properly to ensure that the company accounts and books are not
manipulated.
• Information about the company should be latest, from trusted source, easily accessible and correct
• Companies that are majority owned by families certainly have a great opportunity to do manipulation
because of the support of the majority. Investors often worry about the situation. Thus, investors must pay
attention to the majority ownership in a company before making an investment so that the existing
governance in the company can run well, impartially and the opportunity for small fraud.
• Institutional investors must counter check the integrity of the company through various reliable resources to
ensure that the stakeholders interest shall be protected at all times and they should take more responsibility

6. 2. the areas of the company culture and structure that could have raised some red flags about Satyam’s
situation
• With deep roots in the structure of social hierarchy derived from influences of Hinduism
• The culture in business in India is that every subordinate or junior must always be obedient to the boss or senior.
• All discussions and decisions are always initiated by top-level parties or executives. If they say no, it is
considered rude and offensive to the authorities.
• They only work to follow superiors and must not argue. This is one of the reasons why the situation in Satyam
allows manipulation by the directors.
• In addition, the structure that exists in Satyam, which is predominantly family, makes the red flag on Satyam
increasing. The many interests in the name of the family make the situation in Satyam
• there was also a dispute between parties in Satyam, including internal auditors, management, and external
auditors

7. 3. Challenges of effective implementation of a whistleblower policy in a company such as
Satyam
• Each unit of the company was unaware about the performance of other
departments
• Top management of the company consists family members of founder.
• Top management was allotted large quantities
shares to ensure that they had incentives to take actions.

8. 4. Independence of the board and the ability of the board to exercise independent judgment on the corporate
affairs of Satyam
• Satyam’s board of directors was responsible for approving major corporate initiatives and
reviewing performance.
• The board is involved only at taking the strategic decisions while other major decisions are
taken by the founders.
• There were three board committees:
The Audit
Remuneration
Investors Grievance Committees
• Executive directors of Satyam were:
Ramalinga Raju
B. Rama Raju
Ram Mynampati.
• Two of executive directors among three were from Raju family.

9. 4. Why non-executive directors would still have missed the fraud
perpetrated in the company over a number
of years?
•According to Professor Jitendra Singh, a management
professor at Wharton board members attitude of
working for those who brought them on to the board.
•Shortage of independent directors in board.