Hi, Here's one more presentation I gave in the 3rd semester of MBA in year 2008. The presentation is all about Satyam Scam. There's a .PDF file attached in slide number 17 describing what lies ahead for the Satyam. Please don't forget to open it in order to understand the risks associated if Satyam gets acquired. Thanks, Varun M.

1. ETHICAL ISSUES INETHICAL ISSUES IN
SATYAMSATYAM

2. Saga of Decline Of IT MajorSaga of Decline Of IT Major

3. INTRODUCTION &INTRODUCTION &
ACHIEVEMENTSACHIEVEMENTS
•Founded By Mr. B.Ramalingam Raju inFounded By Mr. B.Ramalingam Raju in
19871987
•44thth
fastest growing IT company infastest growing IT company in
India.India.
•9 % market share9 % market share
•53,000 employees with revenue $2.153,000 employees with revenue $2.1
billionbillion
•It is the first company of India listed inIt is the first company of India listed in

4. AWARDS 2007-08AWARDS 2007-08
EVERYTHING WAS GOING FINEEVERYTHING WAS GOING FINE
 Asian MAKE (Most Admired KnowledgeAsian MAKE (Most Admired Knowledge
Enterprise) AwardEnterprise) Award
 SAP Pinnacle Award 2008 underSAP Pinnacle Award 2008 under
“Service – Ecosystem Expansion“Service – Ecosystem Expansion
(Growth)” category(Growth)” category
 Citizenship Partner of the Year Award,Citizenship Partner of the Year Award,
20072007
 Second-Best Employer in IndiaSecond-Best Employer in India
 The only IT Services company fromThe only IT Services company from
India in the list of the TOP 20 BestIndia in the list of the TOP 20 Best
Employers in AsiaEmployers in Asia

5. THEN CAME THE TURNINGTHEN CAME THE TURNING
POINTPOINT
(MAYTA’S ACQUISITION(MAYTA’S ACQUISITION
PROPOSAL)PROPOSAL)

6. Maytas – A Hole in theMaytas – A Hole in the
ShipShip
It all started on 16.12.2008, when Ramalinga Raju thought, buying
an infrastructure firm made sense!
He, then, nailed a hole in a sinking ship Satyam was. It is a
common affair in Indian Inc to make such pointless investments to
divide the dividends by manipulating profit margins.
Satyam’s Maytas bid dragged media in to it.
Satyam intended to buy entire stakes in Maytas Properties for
$1.3 Billion and 51% stakes in Maytas Infra for another $300
Million.
Raju and his immediate family members own up to 35% stakes in
Maytas.
The deal was to be financed from “surplus” cash.
Investors and the Fund managers were shocked that the bidding
process was carried without informing them.
Raju said that the deal was in complete interest of the investors
and informing them was “unnecessary”.
On following days, Satyam’s share prices started falling

7. MAYTAS – A HOLE IN THE SHIPMAYTAS – A HOLE IN THE SHIP
Satyam’s share prices fell in U.S.A. after the bid was announced.
The interrogation by investors forced Raju to reconsider his
decision, which he pulled off within hours.
World Bank, one of Satyam’s esteemed customers banned it from
providing service for next 8 years.
Satyam’s image in front of its customers, investors, and more
importantly, the entire nation got dented.
Share prices tumbled even further by about 16%. The aborted buy-
out deal and the ban indicated that something seriously went
wrong at the board level.
Valuation of Maytas turned out to be fraudulent. All of the four
Firms, including Merry Lynch and JP Morgan denied having done
any Valuation. The move sparked row between the institutional
investors from across the world and Satyam’s board members,
One of company’s two independent directors T.R. Prasad
defended the decision of buy-out believing it to be increasing
share value, Another director Mr. Shrinivasan quit before it was
too late.
Vinod Dham was also one of the non-executive directors of Satyam
who later resigned in the wake of controversy.
Two days after the controversial deal, Indian government ordered
separate probe in to the matter
On 7th January, Ramalinga Raju wrote a letter to all the board
members and SEBI, informing them about inflated cash, faked

8. INDIA’S ENRONINDIA’S ENRON
77THTH
JAN 2009JAN 2009
SATYAM’S CHAIRMAN ADMITTEDSATYAM’S CHAIRMAN ADMITTED
FRAUDFRAUD
DeclineDecline
ofof
India’sIndia’s
FirstFirst
ITIT
MultinationMultination
alal

12. OTHER ISSUESOTHER ISSUES
(WORLD BANK BAN & UPAID LAWSUIT)(WORLD BANK BAN & UPAID LAWSUIT)
 The World Bank had banned Satyam from
doing business with it for 8 years due to
inappropriate payments to the World
Bank's staff. The World Bank accused
Satyam of giving improper benefits to its
(the Bank's) staff and of failing to
maintain documentation to support fees
charged for its subcontractors.
 UK mobile payments company Upaid
Systems has sued Satyam for over 1
billion US dollars on complaints of fraud,
forgery and breach of contract.

13. OTHER ISSUES CONT..OTHER ISSUES CONT..
 Company claims of 53,000 employees in
2008 but there’s a doubt somewhere on
this figure also. Some says the actual
number is 41,000 and rest 12,000 are
ghost employees which are shown to
gain Tax advantages. Govt. is
investigating as there’s still more to
come

14. QUESTIONS TO BEQUESTIONS TO BE
RAISEDRAISED
1. Is it really that easy to show non existent bank
balances worth Rs. 5000 crores
2. Should we believe that bank balances never existed?
3. Is Satyam scandal just about a promoter
manipulating the financial statements of his company
to show a superior performance?
4. What about Satyam’s customer’s?
5. Will Satyam face more Lawsuits?
6. What about External Auditor Pricewaterhouse
coopers?

15. QUESTIONS TO BEQUESTIONS TO BE
RAISEDRAISED
7. What is going to be the fate of Ramalingam Raju?
8. What can be done to prevent these type of Frauds in
future?

16. FUTURE OF SATYAM ?FUTURE OF SATYAM ?
What Lies ahead in the Womb ofWhat Lies ahead in the Womb of
future for Satyam Computerfuture for Satyam Computer
services?services?

17. ANALYSIS OF FUTUREANALYSIS OF FUTURE
EVENTSEVENTS

18. CURRENT UPDATECURRENT UPDATE
COMPANY’S IN RACECOMPANY’S IN RACE

19. CURRENT UPDATECURRENT UPDATE
CONT…CONT…
 IBM has decided not to bid for Satyam
 Spice group still undecided and has
already threatened to quit
 Larsen & Toubro is facing slowdown in
business
 Tech Mahindra is looking forward for
acquisition
 Government is not interested at all in
take over