The Satyam Scandal involved accounting fraud of over 7,800 crores at Satyam Computers. In January 2009, the company's founder, Ramalinga Raju, confessed to inflating profits and faking accounts for several years. This resulted in a massive stock price drop. An investigation found that for 7 years, financial statements were fabricated and the accounting gap was attempted to be filled through an acquisition. The scandal impacted 50,000 jobs and India's image. New reforms aimed to prevent such frauds through stricter auditing, compliance and corporate governance standards.

1. The Satyam Scandal

2. THE RISE OF SATYAM

3. Company Profile
 Satyam Computers was founded in 1987.
 It converted into Public Ltd Co. in 1992.
 The company offers consulting and
information technology services spanning
various sectors.
 Mahindra Satyam is overall ranked #153
by Fortune India 500 in 2011.
 Satyam’s network covers 66 countries and
53000 employees across six continents. It is
listed in BSE, NSE, NYSE

4. AWARDS ACHIEVED
 Top-50 Marketers Award, under the
Resurgent Marketers category for 2010 by
Pitch India.
 Mahindra Satyam BPO honored as “India’s
Most Customer-Responsive BPO
Company”AGC Networks, The Economic
Times, Ernst & Young and Nielsen.
 Ranked # 1 in the ASTD BEST Award
American Society for Training and
Development (ASTD).

5. What happened on January
7,2009??

6. THE DISASTROUS REVELATION
 Accounting fraud of over 7800 crores rupees.
 From past 7 years accounting books were
cooked:
-Profits were inflated
-Understated liability and overstated debts.
-Accrued interest.
-The gap in the balance had risen due to inflated
profits.

7. FABRICATED INCOME STATEMENTS

8. Stock Charting

10. THE LAST ATTEMPT

11. The MAYTAS Acquisition
• Maytas infra and Maytas properties : firms
owned by the sons of Raju.
• Planned to buy the Maytas to fill the gap in the
balance sheet.
• Last attempt Raju made to fill the gap in the
balance sheet.
• Major shareholder rebellion
• Acquisition was termed “Poor corporate
governance”.

12. CONFESSION LETTER
 Raju wrote in the confession letter
“Every attempt to fill the gap failed".
It was like riding a tiger, not knowing how to get off without
being eaten”.

13. CONFESSION LETTER
Maytas Acquisition
Last attempt to fill the gap.
Top officials were unaware
Only MD & CFO were others.
No personal profits.
Did not sell any shares from 8 years.

14. • Biggest single day fall for a stock in
Satyam stock market
77%
shares • 175 Rs/-(Jan 6th)
• BSE sensex fell by 749.05 i.e. 7.25% .
Stock Market • NSE fell by 192.40 points i.e. 6.18%.
Companies • 11464 Crore 1607 Crore
worth
All time low of Rs 11.50 on 9th jan and closed at 23.75 Rs/-.
Compared to highest of 524.90 Rs/- on may 29,2008

15. B.
Ramalinga RamaRaj
Raju u
V. Srinivas S. T Srinivas
Gopalkrishnan

16. THE ILLUSIONISTS
• Ramalinga Raju: Satyam Former Chairman
• B Rama Raju: Brother of Ramalinga Raju
Former Managing director .
• V Srinivas: Ex-chief financial officer
• S Gopalakrishnan: PriceWaterhouse Auditor
• Talluri Srinivas: PriceWaterhouse Auditor

17. CURRENT STATUS
 GOVT CONCERNED ABOUT SATYAM
EMPLOYEES.
 GOVT TO HELP CBI IN SATYAM SCAM
CASE.
 RAMALINGA RAJU SENT TO POLICE
CUSTODY TILL 22 ND JANUARY.
 CBI INVESTIGATING FURTHER.

18. Ramalingam Raju along with 2 other accused
of the scandal, had been granted bail from
Supreme court on 4 November 2011 as the
investigation agency CBI failed to file the
chargesheet even after more than 33 months
of Raju been arrested

19. PROBABLE REASONS
 PRESSURE TO MEET EXPECTATION
 OVERCONFIDENCE
 PERSONAL BENIFITS

20. WHY DID RAJU CONFESS???
RAJU WAS PROBABLY
CONVINCED THAT THE
GAP IN THE BALANCE
SHEET WAS
UNMANAGEABLE.
A PERSON CLAIMED
HIMSELF TO BE A FORMER
SENIOR EXECUTIVE IN
SATYAM INVOLVED WITH
ITS CONTRACT WITH THE
WORLD BANK , ACTED AS

21. THE GOVERNMENT
THE GOVERNMENT TOO IS
EQUALLY GUILTY IN NOT HAVING
MANAGED TO SAVE THE
SHAREHOLDERS, THE
EMPLOYEES AND SOME CLIENTS
OF THE COMPANY FROM LOSING
HEAVILY.

22. SATYAM UNDER
RECONTRUCTION
 Appointing New Board.
 Board appointed by Government.
 Tech Mahindra wins bid for Satyam
scam.

23. VISION STATEMENT
 “to leverage information, knowledge, and
technology to enhance human endeavor.

24. CORE VALUES OF SATYAM
 Belief in people
 Entrepreneurship
 Customer orientation
 Pursuit of excellance

26. EFFECTS OF SATYAM SCANDLE
 Jobs of over 50000 technocrats were at risk.
 Country`s booming economy was at risk.
 The GDP fell by 0.4%.
 I.T sector suffered a downturn.
 India`s global image was tarnished.
 Indian stock market fell dramatically.

27. ACTIONS TAKEN
 New board of directors were appointed.
 Disclosure of pledged securities.
 Increased financial accounting disclosure.
 Adoption of international standards.
 Creation of new corporate code of conduct
by Ministry of Corporate Affairs.
 Steps taken by ICAI.

28. CONCLUSION
More scandals like Satyam can be avoided if-
1.If auditing firm is honest.
2.SEBI plays an active role.
3. Periodic review of legal compliance reports
by independent directors.