SATYAM- A Biography

Company profile and history

Companys location and image: Location: Satyam computer service limited main office is situated in Hyderabad,Andhra pradesh,India. Image:

 Profile(before scam): Existence:-Satyam came into existence on June 24 1987. founder :-Mr.Ramalinga raju. no of employees:-1,00,000 plus. Products and services:-software development and consultancy services etc. Ranks:-one of the top 4 it firms in India before 2009. Important names:-Mr.kulvinder singh(marketing Dir), Mr.c srinivas raju(Exe.Dir), Mr.prabhu sinha(Sen.vic pres) etc.

 History: 1987-95: Declared 100% Eou by govt which exports to USA,canada etc. 26 aug 1991 -converted to public co. Set up modern facilities at Hybd,blore etc for global IT challenges and bcam softwr tech park with dedicated 64kbps satellite link . Few years co had joint venture devt wit lead co in US.

 1996-2000: Mutual agreement with various leading IT countries in world. Set up various training schools with leading edu-centers like IITs,IBMs etc. Set more branches at various imp cities in India (like secunderabad,chennai etc). Rated by Swiss based forum and world link magazine as Indias rapidly growing company. First overseas devpt centre in New jersey. With its high margin business,it ventured euro conversion business which is taking off. Second largest internet service provider based on no of customers. Alliance with Microsoft corp (worlds largest system software based company).

 2001-08: First indian company to open its development centre in Dubai internet city. First launches operation in China. World bank gives out-sourcing contract to satyam. Global solution centre in Malaysia. Forms alliance with Yahoo. Multi-agreement with America int tech entp. Satyam partners developing hera fxv- Indias first digital car.

Achievements
first software company in India to get accredited by (SEI CMM) level 5 certificates in 1999. The Company has been named a 2000 Web Business 50/50 award winner for SatyamWorld - its corporate intranet, to become the only company to feature in this list. The Company has received the National HRD award 2000 for outstanding contributions to HRD. Prabhu Sinha, a senior vice-president of Satyam Computer Services, received Qimpro Silver Award for 2000-01. Mr. B. Ramalinga Raju, Chairman of Satyam Computer Services, has been awarded the IT Man of the Year 2000 Award by Dataquest.

 The Company has been rated as one of the 10 most well-regarded companies in the country in prestigious 2000/2001 Review 2000 Survey conducted by the Hong Kong-based Far Eastern Economic Review. The Company has won the Frost & Sullivan market engineering award for Competitive Strategy 2001 in the application service provider category. Bags 2003 Account Performance Award from Strategic Account Management Association (SAMA) during its annual conference in Orlando, Florida. Satyam Computer Services honoured with prestigious IBM Lotus award. Satyam ranked 3rd in Corporate Governance Survey by Global Institutional Investors.

Mr.Ramalinga Raju-life history:

Born on sept 16 1954 in a farmer family in Garagaparru village of west godavari district. Launched satyam comp services on june 24 1987 in Hyderabad. Best entrepreneur award in 2008. Kingpin in satyam fraud case(largest money scam in Indian corporate history).

STUNNING SATYAM FRAUD:

Satyam scandal The admission :Mr. Raju said last week in a shock admission that he had inflated profits, revenues and margins, and invented most of the groups more than $1 billion cash pile, leading to worries that Satyam might not be able to pay its normal operating expenses.
Source: Minister eases fears over Satyams cash flow, Financial Times, Friday, January 16, 2009

 Satyam scandal:how did the system work? (Normal process)

Controlling family

Loan application

Satyam 8%

loan bank

Collateral (guarantee) for the loan

(In case of satyam)

Controlling family
The controlling family does not make its regular loan repayment.

Satyam 8%

loan bank

Collateral (guarantee) for the loan

In 2008 there was a decline on the Indian stock market, and the price of Satyam shares fell. The bank started to sell (liquidate) the Satyam shares it held in order to realize (convert) the collateral into cash.

 Satyam scandal The investigation:

On January 25, 2009 Indian police arrested two employees from the affiliate of PricewaterhouseCoopers who audited Satyam Computer Services, the IT outsourcing giant at the center of the nation's largest fraud inquiry.
The move comes after Satyam founder Ramalinga Raju said he had fabricated $1 billion of assets and confessed to making up more than 10,000 employees to siphon money from the software company.

 Satyam scandal The impact:

The India Stock Exchange took Satyam out of its Nifty Fifty stock index. The Indian affiliate of PricewaterhouseCoopers was the companys auditor. It appears to have c Certified the company had $1.1 billion in cash when the real number was $78 million. The FIFA (Soccer) World Cups in South Africa in 2010 and 2014 in Brazil may need a new official IT services provider, assuming Satyam is not able to fulfill its obligations. Satyam was the first Indian company to list on Nasdaq, but it later moved its listing to the New York Stock Exchange, which now has suspended trading indefinitely. The World Bank said it would no longer do business with the company because Satyam had stolen data and bribed bank officials.

 Life after fraud for satyam:After the tragic fraud.life seemed to be difficult for satyam,but fortunately it found some bidders who were interested in buying company shares.list of bidders is as follows: 1.)Larsen & Turbo 2.)Tech Mahindra 3.)Spice Group. The takeover transaction has many terms and conditions. The buyers shareholdings would have a lock in period of 3 years. The buyer will also not be allowed to sell any assets of the company for the next two years without the approval of the shareholders. The buyer also has to retain the 100 key staffs for next one year, and cannot stop from continuing the main business of the outsourcer. Cooperation with the investigative agencies for investigating the fraud case and cooperation with the regulators is another agreement.

Conclusion:
The fraud shook the whole i.t and corporate sector and exposed the brittleness present in management system in multi-national companies. Fraud resulted as a major setback to the reputation of indian multinational companies being scam-free. It has put investigation agencies on red alert as this fraud may be only a small sign of many such things to come in future. Finally the bid was won by Tech mahindra and satyam hence found a hope of survival in i.t world. Inspite of the tragic fraud,satyam is on its way to recovery and to revive its reputation under Tech mahindra. For the first time,satyam failed to enter the list of top 20 i.t companies given by Dataquest recently because of the unfortunate fraud incident. But keeping in mind companys success rate before the fraud,the road to recovery may not be that long for the new mahindra-satyam.

Thank you