Ramalinga Raju, founder and chairman of Satyam Computer Services Ltd., confessed to a long-running accounting scam at the company. He inflated profits and falsified accounts over many years, misrepresenting the company's financials and misleading investors. When the gap in the balance sheet became too large to conceal further, Raju confessed to the fraud in January 2009. The scam had severe negative impacts, jeopardizing the jobs of 50,000 employees, damaging India's reputation, and causing stock markets and the economy to decline sharply. Regulators launched investigations and new leadership was appointed to restore confidence in the company. In April 2009, Tech Mahindra acquired Satyam to restructure and rebrand it as Mahindra

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PRESENTED BY:- PRESENTED TO:-
RITESH MAHESHWARI ………………………….
3RD SEM (B.com BANKING & FINANCE)

2. SATYAM SCAMWHITE COLLAR CRIME
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3. INTRODUCTION
Satyam Computers was founded in 1987 by “Ramalinga Raju.”
In 1991 company is listed in BOMBAY STOCK EXCHANGE.
In 1992 company went for a Public Issue of Equity Shares
The company has setup facilities at Secunderabad, Hyderabad and Bangalore.
The main objective of setting up a software technology park and a 100 percent export
oriented unit for software development with a dedicated 64 KBPS satellite link.
In 1993 company has entered into a joint venture agreement with Dun & Bradstreet Corp.,
U.S.A. for development of softwares.
In 1996 two offices were set up, one in USA and other in Japan. And the company has
added new business partners in Australia, Canada, Japan and Europe.
In 1999 Satyam Computer, becomes the first Indian information and communication
technology company to be listed on NASDAQ, and Satyam expands footprint to 30
countries.
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RAMALINGA RAJU :-
(Chairman)
► Early life :- Ramalinga Raju, the eldest of four children, was born
on 16 September 1954 to a farming family. He earned a Bachelor of
Commerce degree from Andhra Loyola College at Vijayawada and
subsequently earned an MBA from Ohio University in the United States.
►Career :- In 1987, Raju incubated Satyam Computer Services along
with one of his brothers-in-law, DVS Raju at P&T colony
in Secunderabad and 20 employees. In 1991, Satyam won its first fortune
500 client. Raju was talking about Satyam's ambition of operating out of
50 countries with an employee count of more than 50,000. In 1999, Raju
launched Satyam Infoway (Sify) as Satyam's internet subsidiary, thereby
becoming an early participant in the Indian internet service market. Sify
was later sold to Raju Vegesna.

5. AWARDS :-
Young Entrepreneur of the year Services Award 1999.
IT Man of the year Award 2000
Asia Business Leader Award 2002
Golden Peacock Award for Corporate Governance 2008
(revoked after the fraud was confessed)
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6. The Scam :-
 Ramalinga Raju, the Satyam Computer Services Ltd’s founder and former chairman, and his brother B.
Rama Raju were found guilty of criminal breach of trust. The scam came to light on January 7, 2009
when Ramalinga Raju confessed that the company’s account books and profits were inflated over many
years to the tune of several crores of rupee.
 The police arrested him two days later on a complaint by some shareholders.
 The CBI, which took up investigations in February 2009, put the loss to the shareholders at Rs.14,000
crore. The investigating agency also charged Raju with gaining Rs.2,500 crore by selling his family shares
in Satyam. Raju was charged with floating several front companies to buy land with the scam money.
 He was arrested by the Andhra Pradesh Police on January 9, 2009.
 The CBI, which later took up the investigation, filed three chargesheets against Raju and the other
accused, charging them with cheating, criminal conspiracy, forgery, falsification of accounts and breach
of trust.
 After the scam, Tech Mahindra took over Satyam Computers in a government sponsored auction.
Mahindra Satyam later merged with Tech Mahindra.
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7. How Did It Happened ?
 Raju and his brother, B Rama Raju, were arrested by the Andhra
Pradesh police on charges of breach of trust, conspiracy, falsification
of records and cheating.
 Raju has mislead various investors.
 Raju had also used dummy accounts to trade in Satyam’s shares.
 He has violated the insider trading norm.
 Funds from satyam were diverted to Maytas.
 On 22 January 2009, CBI told in court that the actual number of
employees is only 40,000 & not 53,000 as reported earlier, and that
Mr. Raju had been allegedly withdrawing INR 20 crore rupees every
month for paying these 13,000 non-existent employees.
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8. SCAM RELATION WITH MAYTAS
:-
 Maytas refers to a group of companies founded
by B. Ramalinga Raju. It includes Maytas
Properties and Maytas Infra Limited. Maytas Infra
was originally run by Satyam Computer Services
founder B Ramalinga Raj. It came under the
scanner due to its association with B. Ramalinga
Raju.
 In 2009, B Ramalinga Raju resigned as the Satyam
CEO, admitting to an accounting scam to the tune
of 7136crore rupees. Raju stated that the aborted
Maytas deal was actually a last attempt to "fill the
fictitious assets with real ones".
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9.  PricewaterhouseCoopers (trading as PwC) is a multinational professional
services network headquartered in London, United Kingdom. It is the largest
professional services firm in the world, and is one of the Big Four auditors,
along with Deloitte, EY and KPMG.
 In January 2009 PwC was criticised, along with the promoters of Satyam, an
Indian IT firm listed on the NASDAQ, in a $1.5 billion fraud. PwC wrote a
letter to the board of directors of Satyam that its audit may be rendered
"inaccurate and unreliable" due to the disclosures made by Satyam's (ex)
Chairman.
 Two partners of PricewaterhouseCoopers, Srinivas Talluri and Subramani
Gopalakrishnan, have been charged by India's Central Bureau of
Investigation in connection with the Satyam scandal. Since the scandal
broke out.
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10. CONFESSION (By Raju):- 10
On 7th January, 2009 Raju confessed on poor performance and told that
“ IT WAS LIKE RIDING A TIGER, NOT KNOWING HOW TO GET OFF
WITHOUT BEING EATEN”
WHY DID RAJU CONFESS ?
 The gap in the balance sheet reached unmamageable proportions and
could not be filled anyhow in future.
 The whistle blowers whose email to a Satyam board member triggered
a chain of events.

11. ACTION TAKEN :-
 New board of director were appointed.
 Creation of new corporate code of conduct by Minister of Corporate
Affairs, steps taken by ICAI.
 Regulators Investigating are:-
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12. IMPACT OF THE SCAM:- 12
Jobs of over 50,000 technocrats were at risk.
Country’s booming economy were at risks.
The GDP fell by 0.4%.
I.T. sector suffered a downturn.
India’s global image were tarnished
Indian stock market fell dramatically.

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STOCK MARKET
INDIAN ECONOMY
SHARE HOLDERS
EMPLOYEES

14. RENOVATION OF SATYAM:- 14
Appointing new board.
Board appointed by government:-
• Former nasscom chief – Kiran Karnik
• Chairman HDFC – Deepak Parikh
• Former SEBI member – C. Achuthan
Satyam shares gained over 44% in a day, after appointment of
the new board.
New CEO --- A.S Murthy
Tech Mahindra acquired Satyam on April 13, 2009.

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On 13th APR 2009, VIA FORMAL PUBLIC AUCTION
PROCESS, 46% STAKE IN SATYAM WAS PURCHASED
BY MAHINDRA.
JULY 2009, SATYAM REBRANDED ITS SERVICES AS
“MAHINDRA SATYAM”.

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