THESATYAM FRAUD

GROUP MEMBERS

SHIVANI GOHIL 03 RUBY AGARWAL 24 ANAGHA KALAMKAR 17 BHAKTI SUKHTHANKAR 49 SAYALI MANJREKAR 26 PRATIKSHA MANGAOKAR 25

INTRODUCTION

IT WAS FOUND IN 1987 BY B.RAMALINGA RAJU.LOCATION.BOARD OF DIRECTORS.SERVICE OFFEREDCONVERSION INTO PUBLIC COMPANY.

SATYAM NETWORKSATYAM EMPLOYERS1ST INTERNET SERVICE PROVIDER

ACHIEVEMENTS

2007:- BECOMES THE 1ST ASIAN COMPANY TO FEATURES IN THE TRAINING MAGAZINE’S LIST OF TOP 125 COMPANIES FOR LEARNING.2008:-WON CORPORATE GOVERNANCE (INCLUDING GOLDEN GLOBAL AWARD TWICE).

HOW DID IT HAPPENED?

FLOATED TWO OTHER COMPANIES FOR THEIR OWN PURPOSE .WITHOUT TAKING PERMISSION OF THE SHAREHOLDERS.FAILED TO REPAY THE LOANS.TRANSFER OF MONEY.

SATYAM COMPUTERS WERE BANNED.SOLD OF SHARES.RESIGNATION BY RAMALINGA.

UNDERSTANDING THE SCAM!

THE BALANCE SHEET AS OF SEPTEMBER 30, 2008 SHOWED-INFLATED (NON-EXISTENT) CASH AND BANK BALANCES OF RS. 5040 CRORE (AS AGAINST RS. 5312 CORE REFLECTED IN THE BOOKS)AN ACCRUED INTEREST OF RS. 376 CRORE WHICH IS NON-EXISTENTAN UNDERSTATED LIABILITY OF RS.1230 CRORE ON ACCOUNT OF FUNDS ARRANGED BY BR RAJU.

AN OVERSTATED DEBTORS POSITION OF RS. 490 CRORE (AS AGAINST RS. 2651 CRORE REFLECTED IN THE BOOKS)FOR THE SECOND QUARTER SATYAM REPORTED A REVENUE OF RS.2700 CRORE AND AN OPERATING MARGIN OF RS.649CRORE (24% OF REVENUES)AS AGAINST ACTUAL REVENUE OF RS.2112 CRORE AND AN ACTUAL OPERATING MARGIN OF RS.61 CRORE (3% OF REVENUES)THIS HAS RESULTED IN ARTIFICIAL CASH AND BANK BALANCES GOING UP BY RS. 588 CRORE IN Q2 ALONE.

FRAUD

THE FOLLOWING ACTION HAS BEEN MADE…

SR NO.

INFLATED FIGURES EFFECT IN BALANCE SHEET

1. Inflated (non-existent) cash and bank balances of Rs. 5,040 crore.

The cash will be reduced by Rs.5040 crore and second effect would be reduction from reserve (1)

2. An accrued interest of Rs. 376 crore, which is non-existent

Accrued interest will be reduced by Rs. 376 crore and second effect would be reduce from reserve (2)

3. An understated liability of Rs. 1230 crore on account of funds arranged by him.

The liability will increase and the second effect would be reduction from reserve (4)

4. An overstated debtors position of Rs. 490 crore (as against Rs. 2651 reflected in the books)

Debtors will be reduced by Rs.490 crore and second effect would be reduction from reserve (3)

CONFESSION

JANUARY 7TH, 2009“ IT WAS LIKE RIDING A TIGER , NOT KNOWING HOW TO GET OFF WITHOUT BEING EATEN “

LETTER RAJU WROTE TO THE SATYAM BOARD

FOLLOWING IS THE TEXT OF THE LETTER :-BALANCE SHEET AS ON 30TH SEPTEMBER 08FOR SEPTEMBER QUARTER (Q2) REVENUE AND OPERATING MARGIN ARTIFICIAL CASH AND BANK BALANCE GOING UP BY RS 588 CRORES IN Q2 ALONEEVERY ATTEMPT TO ELIMINATE THE GAP FAILEDTHE ABORTED MAYTAS ACQUISITION DEAL

R. RAJU FURTHER MENTIONED THAT :-

SHARES WERE NOT SOLD IN THE LAST 8 YEARSNET AMOUNT OF RS 1230 CRORE WAS ARRANGED TO SATYAM IN THE LAST 2 YEARSNOT TAKEN EVEN ONE RUPEE/ DOLLARNONE OF THE BOARD AND THE FAMILY HAD KNOWLEDGETASK FORCE HAS BEEN MADEAPOLOGISED

RESIGNED AS THE CHAIRMANPREPARED TO FACE CONSEQUENCESCOPIES MARKED TO SEBI AND STOCK EXCHANGE

INVESTORS- PANICKED AS STOCK PLUMMETED & CLASS ACTION SUITS FILED.EMPLOYEES- STRANDED IN MANY WAYS- MORALLY, FINANCIALLY, LEGALLY AND SOCIALLY.CUSTOMERS- SHOCKED AND WORRIED ABOUT THE PROJECT CONTINUITY, CONFIDENTIALITY AND COST OVER RUN.BANKERS - CONCERNED ABOUT RECOVERY OF FINANCIAL AND NON-FINANCIAL EXPOSURE AND RECALLED FACILITIES.

CONSEQUENCE AFTER CONFESSION

IMPACT ON STOCK MARKET

THE SHARE PRICE OF SATYAM WAS FALL DOWN TO 21.3%.

THE BENCHMARK SENSEX SLIPPED OVER TO 7% ON 7 JANUARY 2009.

SATYAM STOCK IS BEING REMOVED FROM ITS S&P CNX NIFTY 50-SHARE INDEX .

SATYAM’S LARGEST SHAREHOLDER, ABERDEEN AMC, DUMPED THE TAINTED SOFTWARE ENTITY’S SHARES.

ACQUISITION BY MAHINDRA GROUP

ALL WELL THAT’S END WELLANAND MAHINDRA – NEW OWNER OF SATYAMPOST RS2890 CRORE AS TAKEOVER

ON 13TH APR 2009, VIA FORMAL PUBLIC AUCTION PROCESS, 46% STAKE IN SATYAM WAS PURCHASE BY MAHINDRA.

JULY 2009, SATYAM REBRANDED ITS SERVICE AS “MAHINDRA SATYAM”.

RESTATEMENT OF RESULT

SATYAM COMPUTER SERVICE RESTATED ITS FINANCIAL RESULT FOR THE PERIOD 2002 TO 2008

Thank you