Scam of Satyam - 3613 Words

Scandal at Satyam: Truth, Lies and Corporate Governance When terrorists attacked Mumbai last November, the media called it India s 9/11. That tragedy has been succeeded by another that has been dubbed India s Enron. In one of the the biggest frauds in India s corporate history, B. Ramalinga Raju, founder and CEO of Satyam Computers, India s fourth-largest IT services firm, announced on January 7 that his company had been falsifying its accounts for years, overstating revenues and inflating profits by $1 billion. Ironically, Satyam means truth in Sanskrit, but Raju s admission -- accompanied by his resignation -- shows the company had been feeding investors, shareholders, clients and employees a steady diet of asatyam (or†¦show more content†¦Rammohan Rao, the dean of the Indian School of Business in Hyderabad (ISB). Rao had chaired both December 16 board meetings. On January 8, he resigned his position as the ISB dean. In a letter to the ISB community, he explained: Unfortunately, yesterday s shocking revelations, of which I had absolutely no prior knowledge, mean that we are far from seeing the end of the controversy surrounding Satyam Computers. My continued concern and preoccupation with the evolving situation are impacting my role as dean of ISB at a critical time for the school. Given that my term with ISB anyway ends in a few months, I think that this is an appropriate time for me to step down. Resigning as Satyam s chairman and CEO, Raju said in a letter addressed to his board, the stock exchanges and the market regulator Securities Exchange Board of India (SEBI) that Satyam s profits were inflated over several years to unmanageable proportions and that it was forced to carry more assets and resources than its real operations justified. He took sole responsibility for those acts. It was like riding a tiger, not knowing how to get off without being eaten, he said. The aborted Maytas acquisition was the last attempt to fill the fictitious assets with real ones. Specifically, Raju acknowledged that Satyam s balance sheet included Rs. 7,136 crore (nearly $1.5 billion) in non-existent cash and bank balances, accrued interest and misstatements. It had alsoShow MoreRelatedProject on Satyam Scam1395 Words   |  6 PagesName: Mr. Hiten S. Panchal Std.: M.M.S. – I Div.: A Roll No.: 643 Sub.: Marketing Applications Practices Project: Satyam Saga SATYAM SAGA Introduction: On 7th January, Wednesday, Satyam Computer Services Chairman B Ramalinga Raju resigns and disappears after confessing to the largest fraud of Rs. 7,136 crore in Indian corporate history. He admitted to committing a gigantic fraud that shook corporate India and the stock markets to the core. In a letter to the board, Raju, 54, unburdenedRead MoreCase Study : The Satyam Scam799 Words   |  4 PagesAishwarya Gokhale The Satyam Scam Studies suggest that there are four basic factors that lead to fraud. First, is the opportunity to commit fraud, second, the incentive to commit fraud, third, the rationalization of the fraudulent act and fourth, the capability to commit the fraud. Satyam Computer Services Limited was a global consulting and IT services company, offering a wide range of solutions, from strategy consulting to implementing IT solutions for customers. Byrraju Ramalinga Raju was theRead MoreFraud As White Collar Crimes1581 Words   |  7 PagesAbstract: We are hearing at least one scam per day on every corners of the globe, these days making scam or fraud is not a big task but the consequences after that are horrible, it effects many individuals lifestyle and even sometimes cost life of human beings Earlier Scams are restricted to some fields but now they are taking place in every field at any incidence of time. Scams are creating a doubt for us whether to believe to business, corporate companies and even our neighbours. TheseRead MoreSatyam Fraud Case1505 Words   |  7 PagesViews on the Satyam fraud case: Before writing this report, I read some articles from The Economic Times, The Times of India, The Hindu and a blog by Shweta Rajpal. In this report, I have tried to figure out what the scam is all about, how it happened, why it was done and the aftermath, exploring corporate governance issues simultaneously. The ‘What’ of the scam: The Satyam scam has been as the Enron scam of India. So one can only imagine the magnitude of wrongdoing and deception. The downfallRead MoreComputer Services Scandal And The Media Scandal Essay1244 Words   |  5 PagesOne day while enjoying Sunday morning, I have been reading a newspaper mean while my focus goes on a major news about Mr.Ramalinga Raju sent to jail and fine imposed 7 Crore on him then I was curious to know about the famous Satyam scam also known as Computer Services  scandal, and   quot;India#39;s Enronquot;(Enron was a US based company which was inflicted with a similar accounting fraud)the news grab by attraction I was eagerly starts reading that news and I was completely shocked afterRead MoreEthics in Accounting1196 Words   |  5 PagesUniversity – New York Accounting for Decision Making, MBA 640 Fall 2011 Required Research Paper Page 1 of 11 Table of Contents Number Content Page Number 1 Introduction 3 2 Ethics in Accounting 4 3 Enron Scandal 6 4 Satyam Scandal 8 5 Conclusion 10 6 References 11 Page 2 of 11 Introduction †¢ What is â€Å"Ethics†? Ethics, also known as moral philosophy, is a branch of philosophy that addresses questions about morality—that is, conceptsRead MoreSatyam : India s Growing Success Essay1041 Words   |  5 PagesSATYAM COMPUTER SCAM Satyam Computer Services Limited was formed in 1987 in Hyderabad (India) by Mr. Ramalinga Raju. The firm began with 20 employees and grew rapidly as a ‘global’ business. It offered IT and business process outsourcing (BPO) services spanning various sectors. Satyam was as an example of â€Å"India’s growing success.† Satyam won numerous awards for innovation, governance, and corporate accountability. From 2003-2008, the company grew measurably. Satyam generated Rs. 25,415.4 millionRead MoreWhy Do Scams Occur in India?968 Words   |  4 Pagestop businessmen, more number of Indians in forbes richest people list, technology, education, strong media, politics on the positive side and when we looking into the worrying part comes big scams, curruption, etc. We are hearing about new scams almost every week these days and interestingly most of these scams are picked up by the media rather than any of our proud investigating agencies or people who are responsible to monitor our financial activities. Billions of dollars are deposited by manyRead MoreThe Structure Of Satyam s Corporate Governance2663 Words   |  11 Pagesmodern corporations. Conversely, for developing country like India, there was a massive accounting fraud in Satyam Computer Services Limited, also known as â€Å"India’s Enron† in 2009 that changed the situation on Indian market, thus the quality of governance has been the significant factor in order to raise money from the capital market. This report discovers how board of directors of Satyam practice their risk corporate governance role. There is relatively investigation into boards and, so far as theRead MoreAnalysis Of Corporate Governance Disclosure Practices Of Listed Companies1000 Words   |  4 Page scompanies without any compulsion from any law. Further Corporate disclosures are important in Indian Context because of the Scams that occurred since liberalization from 1991. For example the Harshad Mehta Scam in 1992(the stock market scandal), Ketan Parekh scam in 2001, Tata Financial Scandal (serious financial irregularities), Satyam Fraud case in 2008-2009, latest 3G scam etc. All these scandals necessitate a need of good corporate governance disclosure principles, rules and regulations. This