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    SATYAM CASE

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    Satyam-Saga

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    MANAGING DIRECTOREX MANAGING DIRECTOR

    RAMALINGA RAJUNEW VICE CHAIRMEN & MANAGINGDIRECTOR

    ANAND MAHINDRA

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    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.

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    CEO C.P GURNANI

    Board Members

    Vineet NayyarC. Achuthan

    T.N. ManoharanC.P. GurnaniSanjay KalraULHAS N. YARGOP

    ORGANISATIONALSTRUCTURE

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    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

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    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

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    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?

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    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

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    DONT TRY THIS AT

    OWN

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    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

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    Group 7 - ET Presentation 14

    Satyam : Dec-2008 to Jan-2009

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    SATYAM SHOULDWIND UP NOW OR NOT ?

    NO

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    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.

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    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

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    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.

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    CONCLUSION

    Now at last we can concludethat the government can

    use SATYAM as an exampleto make companiesabsolutely transparent.

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    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.

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    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.

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    Satyam A SnapshotMajor Satyam Clients

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    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..

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    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

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    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.

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    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 th