Satyam S Scandal
Ramalinga Raju
The man behind the rise and fall of SATYAM's success
Presented By:
11/18/2014
Students of MSc. Financial and Managerial
Accounting
• Sonia Saher
• Mohammad Waqas
• Lu Tran Diem Trinh
• Xin Wang
2
Roadmap:
Introduction to Satyam and agency conflict overview
Stakeholders at Satyam (presenter M. Waqas)
Inadequacy in Satyam’s Corporate Governance (Presenter Trinh)
Suggestions to save Satyam ship (Presenter Xin)
Questions will be entertained at the end
11/18/2014
3
B. Ramalinga Raju, January 7th 2009
"It was like riding a tiger, not knowing how to get off without being eaten"
11/18/2014
4
Overview:
Targe t is n o t achi lets a eved dd Rs
.
the re
5
venue 00bln to the ta t rget f o achieve o r co m pany Accounting Fraud is a deliberate and improper manipulation of the recording of sales revenue and/or expenses in order to make a company's profit performance appear better than it actually is.
11/18/2014
5
Agency Conflict in Satyam
• Ramalinga Raju (CEO & Founder of Satyam)
• Satyam won Golden Peacock award twice for best governance. • Satyam BOD consisted of well experienced professionals.
• Was Raju alone responsible for that fraud?
• MAYTAS, a black cat in dark room!!!
• How can the Cash and bank balance gap could have created?
• to inject cash before reporting day by unbanked checks.
• statements for liquid funds were forced and duplicated since most cash and bank entries are checked by juniors in audit firms.
• auditors colluded with management.
• least likely, bank could have also colluded with
11/18/2014 management.
Ref: IBN-CNN news 07.Jan.2009 11:45am
6
Stakeholders’ Stake at Stake
Presented by:
Mohammad Waqas
11/18/2014
7
Stakeholders affected By
Satyam
Stakeholders that were affected by Satyam’s failure in corporate governance are:
11/18/2014
Employees
Shareholders
Auditors
Clients/customers
Indian Government
Competitors
Creditors/investors
8
Employees:
Employees were
The man behind the rise and fall of SATYAM's success
Presented By:
11/18/2014
Students of MSc. Financial and Managerial
Accounting
• Sonia Saher
• Mohammad Waqas
• Lu Tran Diem Trinh
• Xin Wang
2
Roadmap:
Introduction to Satyam and agency conflict overview
Stakeholders at Satyam (presenter M. Waqas)
Inadequacy in Satyam’s Corporate Governance (Presenter Trinh)
Suggestions to save Satyam ship (Presenter Xin)
Questions will be entertained at the end
11/18/2014
3
B. Ramalinga Raju, January 7th 2009
"It was like riding a tiger, not knowing how to get off without being eaten"
11/18/2014
4
Overview:
Targe t is n o t achi lets a eved dd Rs
.
the re
5
venue 00bln to the ta t rget f o achieve o r co m pany Accounting Fraud is a deliberate and improper manipulation of the recording of sales revenue and/or expenses in order to make a company's profit performance appear better than it actually is.
11/18/2014
5
Agency Conflict in Satyam
• Ramalinga Raju (CEO & Founder of Satyam)
• Satyam won Golden Peacock award twice for best governance. • Satyam BOD consisted of well experienced professionals.
• Was Raju alone responsible for that fraud?
• MAYTAS, a black cat in dark room!!!
• How can the Cash and bank balance gap could have created?
• to inject cash before reporting day by unbanked checks.
• statements for liquid funds were forced and duplicated since most cash and bank entries are checked by juniors in audit firms.
• auditors colluded with management.
• least likely, bank could have also colluded with
11/18/2014 management.
Ref: IBN-CNN news 07.Jan.2009 11:45am
6
Stakeholders’ Stake at Stake
Presented by:
Mohammad Waqas
11/18/2014
7
Stakeholders affected By
Satyam
Stakeholders that were affected by Satyam’s failure in corporate governance are:
11/18/2014
Employees
Shareholders
Auditors
Clients/customers
Indian Government
Competitors
Creditors/investors
8
Employees:
Employees were