SATYAM

"SINKING SHIP OR TIP OF ICEBERG"

SCAM

Do You KnowHim?

B RAMALINGA RAJU FOUNDER AND FORMER CHAIRMAN OF ONE OF THE BIGGEST IT GIANT OF OUR NATION “SATYAM COMPUTERS” AND …………………………GUESS WHAT THE PRIME CONVICT IN THE BIGGEST SCAM OF COUNTRY

SATYAM COMPUTERS WHAT IT IS ABOUT ?FOURTH LARGEST IT OUTSOURCING COMPANY OF INDIAEMPLOYEES MORE THAN 50,000 PEOPLE IN INDIA HIGH GLOBAL REPUTATIONOFFERS SERVICES TO MORE THAN 550 MNC’S

So who has to be blame?

Former chairman B.RAMALINGA RAJU IS THE PRIME CONVICT IN THE CASE WITH SEVERAL OTHER BOARD MEMBER’S

* SATYAM SCAM INVOLVES AMOUNT CLOSE TO 10,000 CRORE

* SATYAM IS THE FOURTH LARGEST IT FIRM IN INDIA CARRYING INDIA'S OUTSOURCING IMAGE GLOBALYSO IT'S ABOUT NATION'S IMAGE

HOW DOES SUCH A SCAM MATTER?

HOW IT HAPPENED

AN ANNOUNCEMENT THAT SHOCKEDTHE CORPORATE INDIA THAT B.RAMALINGA RESIGNED .

The COMPANY’S BALANCE SHEET WAS INFLATED TO Rs 5,361 CRORE AT

THE END OF SEPTEMBER 2008 AGAINST THE ACTUAL Rs 5,040 CRORE.

There is an artificial cash balance of Rs 588 crore in sept 2008.

Raju also admitted that Satyam's profits were inflated over several years. And it is difficult for him to stop this fraud gap. He added, "It was like riding a tiger, not knowing how to get off without being eaten." The Maytas deal was the last attempt to fill the fictitious assets with real ones.

Raju also said Rs 1,230 crore was arranged to Satyam, which is not reflected in its books, to keep Satyam's operations running. For this the promoter had to pledge the promoter shares and raising funds from other sources.

HOW DID THE SCAM MATTER TO THE NATION ?

JOB’S OF OVER 50,000 TECHNOCRATS WERE AT RISK

COUNTRY’S BOOMING ECONOMY FEARED SLIGHT COLLAPSE AS COUNTRYS GDP FELL BY ESTIMATED 0.4%

INDIA’S IT SECTOR SUFFERED DOWNTURN AS IT’S IMAGE WAS TARNISHED GLOBALLY

How it was caught?

Satyam Computers had on December 16, 2008, announced

that it will acquire two group firms – Maytas properties and Maytas Infra for $1.6 billion (about Rs 8,000 crore) as part of its diversification strategy , this create a alleged violation of corporate governance laws.

HOW GOVERNMENT KNOWS IT ?

The ministry of corporate affairs later ordered a probe into whether the company violated any corporate governance laws while entering into such a deal involving share holders' money.

IMPACT ON STOCK MARKET

News of what is possibly the country's biggest corporate fraud, sent the indices tumbling. The benchmark Sensex slipped over 7% on Wednesday, 7 January 09. Companies perceived to have poor corporate governance standards were most affected.

The company’s share price has fallen 21.3 per cent since December 15, the day before the crisis broke.

SALVAGING SATYAM

KIRAN KARNIKFORMER PRESIDENT OF NASSCOM

To stabilize the sinking Satyam Computers, the Government nominated banker Deepak Parekh, IT expert Kiran Karnik and former SEBI member C Achutan to the IT company's board.

.

ALL WELL THAT’S END WELL

Anand Mahindra, Chairman, Tech Mahindra, the new owner of Satyam, will address the first board meeting of the company post the Rs 2,890-crore takeover, giving hope and future to Satyam’s 45,000-50,000 employees. A moment of truth for Satyam and a victory for the government and the regulators.