2. Group member
• Pravesh
• Vijay
• Bharti
• Komal
• Himanshu
• Srikant

4. Types of scam
 Internet scam
 Banking scam

5.  Telecom scam
 Corporate scam

6. What is corporate governance ?

7. Major Reasons of Corporate Frauds in India
 Weak Financial Control leads to poor performance.
 Poor Performance Companies as due to poor compensation don’t have
qualified internal audit department, internal control and checks.
 Poor Performance Companies are Defaulters of banks/ financial institution.
 Profit making company absorbs debts, loans and advances, fixed assets and
investments to achieve tax planning.
 Additional disclosures in financial statements reduces or prevent fraud.
 Proper and complete disclosures give complete picture of any financial
irregularity.
 Mergers and Amalgamations provide an opportunity to commit fraud

8. Major Corporate Scams after existence of SEBI
Total amount involved in corporate frauds- Rs. 50,414 Crore
1
2
3
4
5
6
7
8
9
10
11
Harshad Mehta securities scam
Preferential allotment scam
Cobbler scam
Virender Rastogi scam
JVG scam
Ketan Parekh securities scam
IPO-Demat scam
Satyam scam
Saradha scam
Reebok Shoes Company scam
National Spot Exchange Limited scam
5,000
5,000
2,880
43
1,000
1,250
146
10,000
4000
8700
5600
1992
1995
1995
1996
1998
2001
2005
2008
2013
2013
2013
YEARNO Name of the Scam AMT

9. Harshad Mehta securities scam
 Introduction
 History
 cost

10.  Impact on others
 Regulatory action taken
against Mehta

11. Reebok Shoes Company scam
 Introduction
 History
 cost

12. Impact of scam
 Reebok sales declined 26
per cent on a currency-
neutral basis
 Reebok brand’s revenue in the
quarter 2011-2012 was at 336
million euro as against 427
million euro in the year- 2010-
2011.

13. Satyam scam

14. INTRODUCTION
SATYAM COMPUTER SERVICE LIMITED
 Founded in 1987 by MR.B RAMALINGA
 The company offers consulting and information technology
services
 The company was listed with
New York stock exchange
national stock exchange
Bombay stock exchange

15. HISTORY
 Who is B.Ramlinga raju ?
 Career of B.Ramlinga raju
 Awards

16. People behind satyam scam
 Ramalinga raju :satyam former chairman
 B Rama raju: Brother of Ramalinga raju
 V srinivas :Ex-chief financial officer
 S gopalakrishna :price Waterhouse auditor
 Talluri srinivas :price Waterhouse auditor

17. Reason for satyam scam
 He was blamed that he was using the funds of the investors for
the family business
 Raju wanted to take over his MAYTAS INFRA and MAYTAS
PROPERTIES(Company of his sons)
 World bank had banned the satyam to take any services for 8
years (due to illegal profit and lack of essential document).

18. What crime he has constituted ?
1) Raju and his brother, B Rama Raju, were arrested by the
Andhra Pradesh police on charges of breach of trust,
conspiracy, cheating, falsification of records
2) Raju has mislead various investors.
3) Raju had also used dummy accounts to trade in Satyams
shares
4) He has violated the insider trading norm.
5) Funds from Satyam were diverted to Maytas
6) On 22 January 2009, CID told in court that the actual number
of employees is only 40,000 and not 53,000 as reported earlier
and that Mr Raju had been allegedly withdrawing INR 20 corer
rupees every month for paying these 13,000 non-existent
employees.

19. IMPACT OF SCAM
Stock Market Employees Indian economy
Stake-holders Share-holders

20. More scandals like Satyam can be avoided if:
 If auditing firm is honest.
 SEBI plays an active role.
 Periodic review of legal compliance reports by
independent directors