Professional Documents
Culture Documents
Introduction
• Born on September 16,1954 in a traditional agricultural
family in Andra Pradesh
Awards
• The Black Day: 7th January, 2009
“Every attempt to fill the gap failed.. It was like riding a tiger,
not knowing how to get off without being eaten..”
The Revelation
• Satyam shares fell by 77% to Rs.175
• Biggest single day fall for a stock in stock market
After Revelation
• SEBI, the stock market regulator, said that, if found guilty, its
license to work in India may be revoked
• The New York Stock Exchange has halted trading in Satyam
stock
• India’s National Stock Exchange has announced that it will
remove Satyam from its share index
• Satyam’s shares fell to 11.50 rupees on 10 January 2009, their
lowest level since March 1998, compared to a high of 544
rupees in 2008.
After Revelation
• Falsifying the financials of the company
• Profits were inflated
• Overstated current assets and understated liabilities
Issues
• Information regarding fixed assets tampered
• Showed fixed assets of Rs. 3318.37 crores
Issues
• Failed to provide transparent and ethical disclosure
Issues
• Lack of financial expertise of Board of Directors
Underlying Issues
• Put a Question mark to the corporate governance practices in
India
• Casted doubts about the fair and independent role of auditors
• Authenticity of Pricewaterhouse damaged
• Nation’s loss of trust and credibility in the eyes of foreign
investors
• Employees suffered from financial, social and emotional
damage
• Loss to clients, shareholders and lenders
Major culprits
• Pressure to meet expectations
• Growing competition
• Threat of being overtaken
• Over confidence
• On their abilities
• Personal benefits
• Siphoning off funds
• Salary of non-existent 13000 employees
Probable reasons
• Raju was probably convinced that the gap in the balance
sheet reached unmanageable proportions and could not be
filled anyhow in the future
Why a confession?
• Under reconstruction
• New board appointed by government
• Former Nasscom Chief- Kiran Karnik, Chairman HDFC – Deepak
Parikh, Former SEBI member- C. Achuthan
Satyam now
• B Ramalinga Raju and his brother Rama Raju (former M.D)
have been sentenced to seven years’ jail and fined Rs 5 crores
each
• Similar sentence on eight others including V. Srinivas (former
CFO), S. Gopalakrishnan (Pricewaterhouse Partner), Talluri
Srinivas (Pricewaterhouse Partner), B Suryanarayana Raju, G
Ramakrishna, G Venkatapathi Raju, Srisailam and VSP Gupta
(all former Satyam staff)
Satyam verdict
Thank you…