Download - Satyam Case,03
-
8/14/2019 Satyam Case,03
1/34
SATYAM CASE
-
8/14/2019 Satyam Case,03
2/34
-
8/14/2019 Satyam Case,03
3/34
Satyam-Saga
-
8/14/2019 Satyam Case,03
4/34
MANAGING DIRECTOREX MANAGING DIRECTOR
RAMALINGA RAJUNEW VICE CHAIRMEN & MANAGINGDIRECTOR
ANAND MAHINDRA
-
8/14/2019 Satyam Case,03
5/34
PENALTY 1. Under the companies act, if you present fraudulent
accounts to shareholders, then in itself is an offence butthe amount of publishment is not as severe as under
SEBIs Law.2. Under the IPC this is cheating under section 420 and
that could involve atleast 7 years imprisonment.3. Its criminal offence under section 24 of the SEBI Act
and could mean penalty and imprisonment of upto 10years.4. The audit company, Price Water House Coopers, which
was supposed to pay a sum of rs. 5 lakh.
-
8/14/2019 Satyam Case,03
6/34
CEO C.P GURNANI
Board Members
Vineet NayyarC. Achuthan
T.N. ManoharanC.P. GurnaniSanjay KalraULHAS N. YARGOP
ORGANISATIONALSTRUCTURE
-
8/14/2019 Satyam Case,03
7/34
On 7 January 2009, companys previous Chairman Ramalinga Raju resigned after notifying board members and the Securities and Exchange Board of India (SEBI)that Satyam's accounts had been falsified
Raju confessed that Satyam's balance sheet of 30 September 2008 contained:
Inflated figures for cash and bank balances of Rs 5,040 crore (US$ 1.04 billion) (asagainst Rs 5,361 crore (US$ 1.1 billion) crore reflected in the books).
An accrued interest of Rs. 376 crore (US$ 77.46 million) which was non-existent.
An understated liability of Rs. 1,230 crore (US$ 253.38 million) on account of fundswas arranged by himself.
An overstated debtors' position of Rs. 490 crore (US$ 100.94 million) (as againstRs. 2,651 crore (US$ 546.11 million) in the books).
Raju claimed in the same letter that neither he nor the managing director hadbenefited financially from the inflated revenues.
He claimed that none of the board members had any knowledge of the situation inwhich the company was placed
-
8/14/2019 Satyam Case,03
8/34
Maytas was a company owned by the RajuFamily with a majority stake of 36%Chairman of Satyam, B.R. Raju proposed to
purchase maytas for cash.B.R. Raju proposed the deal with an intention
to Cover up the inflated cash balance.The investor objected the deal as entire cash of
Satyam was being transferred to promoters
through Maytas.B.R. Raju called of the deal to avoid gettingcaught and being exploited.
SATYAM-MAYTAS DEAL
-
8/14/2019 Satyam Case,03
9/34
Change the name of the company.
Reconstitution of the board :- Restore themanagement of the company and appoint some
reputed people as the board of directors.
Try building confidence in the clients to get back the lost projects.
The image of the company could be revived by aseries of press conferences highlighting theon going contracts with the clients.
It could also be merged with any other softwarecompany.
WHAT MANAGEMENT COULE
DO?
-
8/14/2019 Satyam Case,03
10/34
Tech Mahindra is payingRs1757 crorefor a 31% stake in the
company, or Rs 58per share.
Satyam Computer Services
has now zoomed 15% to Rs54.20 ahead of theannouncement of thehighest bidder forthe company on April 13,
Tech Mahindra wins bid for Satyam Scam
-
8/14/2019 Satyam Case,03
11/34
DONT TRY THIS AT
OWN
-
8/14/2019 Satyam Case,03
12/34
SATYAM TO MAHINDRASATYAM
Mahindra Satyam. Type : Public
BSE:500376NYSE: SAY ADR
Founded : 1987Headquarters: : Hyderabad, IndiaKey people: : Vineet Nayyar (Chairman) C.P. Gurnani (CEO) A. S. Murty (CTO)Industry : IT Services
IT consultingSoftware servicesOwner(s) : Mahindra GroupWebsite : MahindraSatyam.net
-
8/14/2019 Satyam Case,03
13/34
-
8/14/2019 Satyam Case,03
14/34
Group 7 - ET Presentation 14
Satyam : Dec-2008 to Jan-2009
-
8/14/2019 Satyam Case,03
15/34
-
8/14/2019 Satyam Case,03
16/34
-
8/14/2019 Satyam Case,03
17/34
-
8/14/2019 Satyam Case,03
18/34
SATYAM SHOULDWIND UP NOW OR NOT ?
NO
-
8/14/2019 Satyam Case,03
19/34
INDIAS STEP TO SAVE SATYAM The Indian Government had stated that it mayprovide temporary direct or indirect liquiditysupport to the company
Govt. appointed new board of members for Satyamconsisting of heavy weights from India's corporatesector.
-
8/14/2019 Satyam Case,03
20/34
20
Role of PWC
PWC Satyams auditors since Jun 2000Credibility of PWC???...amount too big to be noticedPWC:
our audit in accordance with the auditing standardsgenerally accepted in IndiaSatyam's financial statements are the responsibilitiesof the company's managementunder Satyams management controls over financialreporting and auditingAudit reports between June 2000 to September 2008unreliable
-
8/14/2019 Satyam Case,03
21/34
-
8/14/2019 Satyam Case,03
22/34
4) With new and honest people working inthe company under a proper observation,the company can be proved as an asset forthe nation.
5) If we look back at the track records of thecompany before the scam, the projectworks done are very good and are reallybankable.
-
8/14/2019 Satyam Case,03
23/34
CONCLUSION
Now at last we can concludethat the government can
use SATYAM as an exampleto make companiesabsolutely transparent.
-
8/14/2019 Satyam Case,03
24/34
The profit margins were as low as 3%as declared by Chairman in his letter tothe Board.
3. Maximize the returns of thestakeholders
4. High interest of Promoter family inthe company & hence to protect it frombeing taken over.
-
8/14/2019 Satyam Case,03
25/34
JOURNEY OF SATYAMSatyam Computer Services Ltd. was founded by B.RamalingaRaju in 1987.One of the most prominent companies of India, and it is also oneof the constituents of Nifty.It was the first company of India listed in three International stockExchanges i.e. NYSE, DOW and EURONEXT.
4 th largest IT company in India.9 % market share53,000 employeesRevenue $2.1 billionThe company offers a variety of information technology (IT)services spanning various industry sectors.In June 2009, the company unveiled its new brand identityMahindra Satyam subsequent to its takeover by the MahindraGroups IT arm, Tech Mahindra.
-
8/14/2019 Satyam Case,03
26/34
Satyam A SnapshotMajor Satyam Clients
-
8/14/2019 Satyam Case,03
27/34
LEADER TO BAD LEADER
He founded Satyam Computers and was its Chairman until January 7,2009 when he resigned from the Satyam board after admitting tocorporate fraud and cheating six million shareholders, some of whomhave lost their entire life savings. As of November 28 2009, Mr Raju hasyet to appear in court to face charges
He started an IT company with 20 employees that obtained contracts for IT projects, mostly from US companies. Satyam rapidly developed andbecame a multinational company, with thousands of employees spreadover many countries. Raju along with the then chief minister of AndhraPradesh Chandra Bab Naidu was able to obtain high scale government
contracts worth of US $1.2 Billion in Information technology for AP andIndian government..
-
8/14/2019 Satyam Case,03
28/34
December08 brought news of pending litigation by aformer client, online mobile-payments service UpaidSystems which filed a case of intellectual fraud andforgery against Satyam in 2007World Bank banned Satyam from doing any of its work
after it found Satyam employees had hacked into itssystem and gained access to sensitive informationIt also did not renew their five-year contractOn Dec. 16,when Raju announced the company would spend $1.6billion to buy Maytas only to reverse the decision a fewhours later under shareholder pressure
Satyam ADRs lost 50% of their value overnight
ROAD TO DISATER
-
8/14/2019 Satyam Case,03
29/34
FACT SHEETUpaid is a privately-held company registered in the British Virgin Islands for which SatyamEnterprise Solutions, a subsidiary of Satyam Computer , executed a project for developing softwarefor mobile prepaid technology. The project was executed between 1997 and 2002 for whichSatyam got $10 million, partly in shares due to Upaids inability to pay cash .
Soon after, Upaid wished to patent the technology for which the software coding was done by Satyam.For this, they needed the signatures of the 20 Satyam employees who worked on the project. Satyam
helped Upaid get these signatures though some of those employees had by then moved out of thecompany.
Armed with the patent, Upaid, filed a suit against Qualcomm and Verizon Wireless in 2005, allegingthat they were using the patented technology. However, one of the original Satyam employees whohad worked on the Upaid project had moved to Verizon by then. He pointed out that the signature that
was supposedly his on the patent application was a forged one. Upaid was forced to retreat after thisrevelation. In 2007 it filed a suit against Satyam accusing it of forgery and fraud.
-
8/14/2019 Satyam Case,03
30/34
WHAT WENT WORNG T THECOMPANY
Inflated figures for cash and bank balances of INR5,040 cr. (as against INR 5,361 crore reflected inthe books).Operating Profit were artificially boosted from theactual 61 cr. to 649 cr.Satyam also showed an interest earning of Rs. 376 cr. that was fictitious. PWC Satyams auditors since Jun 2000Credibility of PWC???...amount too big to be
noticed
-
8/14/2019 Satyam Case,03
31/34
IMAPCT ON INDUSTRYIt is surely going to be more difficult for otherIndian IT service players to win business.Undoubtedly, this is going to hurt the prospectsof foreign money flowing into India.
Global perception about indian companies.Indian stock market slipped over 7% on 7 th Jan.,09.Indian economy is at a threshold of either
leapfrogging ten years ahead or retracingten years backwards, after the globaleconomic slow down cycle gets completed.
-
8/14/2019 Satyam Case,03
32/34
ANALYSISAs a leader , Mr. Raju did not justify. Hewas undoubtedly a leader who try made agreat success but he became a bad leader,but indulging himself into differentfoggeries.He uses unethical practices
-
8/14/2019 Satyam Case,03
33/34
-
8/14/2019 Satyam Case,03
34/34
34
Satyam Current News
Satyam Lost 46 Customers to Rivals (Economic Times Reports)Applied Materials Inc., Nissan Motor Co., Sony Corp., State FarmMutual Automobile Insurance Co. to name a few.