PowerPoint Presentation

TEAM 4

Rise & Fall of Ramalinga RajuCreating a Success Story with Satyam

Fourth Largest IT sourcing of India

Employees more than 50,000 people in India

High Global Reputation

Offers services to Global customers

2

Rise & Fall of Ramalinga RajuRajus downfall with Maytas

Founded a group of companies called Maytas (properties, Infrastructure) headed by his sons

Inflated cash & Bank Balances in Satyams records

Pledged promoter shareholdings & raised funds to buy properties for Maytas

December 2008 , Raju announced plans to acquire Maytas Grp.

Appalling Confessions!Raising questions on the governance procedures & ethical practices at Satyam

World Bank Blacklisting Satyam for 8 years

5 Independent Board directors quit

Raju Family stake fell down to 5.13% , as few lenders sold the shares

Raju Confesses the complete Scam

Scam & Fall outs Scam Inflated financial statementsArtificial cash balancesProfits were inflated for yearsShowed incorrect number of employees Fall Outs Termination of contracts by clientsHelped competitors get additional business Corporate India at stakeCredibility of International Audit firmsGovernment Intervention New directors appointed

Corporate Governance @ brief

Corporate Governance is a relationship among stakeholders that is used to determine & control the strategic direction & performance of organisations.

It is about holding the balance between economic and social goals and between individual and community goals - Sir Adrian Cadbury

Good Governance MythSatyam had right characteristics , with good governance.

Distinguished Board & Leading International Auditor PwC

Numerous Corporate Awards

A famous deal advisor Merrill Lynch

All annual fillings were filed with US & Indian regulators & Stock exchanges

Tech Mahindra takes over Satyam! A strategy?

Diversification into multiple domains (automotives, insurance etc.) other than telecommunications

Mahindras CEO estimated USD 2 billion as combined revenue

Expansion from a medium sized firm to one of the largest IT firms in India

Road Ahead! for Mahindra Satyam

New Auditors checking the accounts of Satyam , indeed a long process

New owner to submit periodic reports and had to convince Indian Govt. that operations were stable for the Govt. appointed board members to step down, also accelerate restatement of Satyam accounts

New Management needed to act quickly to restore stakeholder confidence

Priorities were to stop customer attrition, boost employee morale & leverage Satyams best practices

Few questions to be addressed..

From the Scam -How did the scam occur?Did the directors even spend time in overseeing Satyams affairs? Were they critical enough?Were the auditors less questioning?What was their relationships with Raju?

To rethink -If past examples existed , then why no lessons were learnt ?Why did history repeat itself?What could have been done to prelude the Corporate Governance failure at Satyam?

TEAM 4Ramya RamkumarAkhila HariSiddhantNixonSrikumarKarthikeyan