Satyam: All's Well That Ends Well in Q2, our revenue increased … on the back of a 4 percent volume growth and the depreciation of the rupee against the U.S. dollar … We believe these factors also enhance annual margin performance … I want to emphasize that Satyam is leaving no stone unturned in our efforts to create a solid foundation for our future. Note to Investors B. Ramalinga Raju, founder and chairman of Satyam Computer Services, reporting the results of the Company for the quarter ended September 2008 the balance is as of September 30, 2008 inflation (stocks nonexistent) in cash and bank accounts … The difference in results emerged only for profits inflated by a period of years (limited only Satyam stand-alone …) Note B. Ramalinga Raju on the board of directors of Satyam January 7, 2009 About B Ramalinga Raju Ramalinga Byrraju Louis (September 16, 1954) is the founder of Satyam Computers and was its president until January 7, 2009 when he resigned from the board after Satyam admitting corporate fraud. For a man who ran the fourth-largest software exporter in India, Mr. Ramalinga Raju was not sighted. His bungalow in Banjara Hills Hyderabad City Deluxe is a sub-structure of two floors, with parking for more than three or four cars. Friends who have treated the 54-year-old chairman of Satyam Computer Services, say it is difficult to know what you think that behind a calm exterior. Walk in the morning, but rarely appears in the night rolling elite of Hyderabad. Behind him, sometimes refer to him as "the man with the smile of Mona Lisa." Mr. Raju, a native of Andhra Pradesh in southern India, had a comfortable lead: He has studied at the abroad, obtaining a degree in business administration from Ohio State University. On his return he began his career with forays into construction. Satyam was established in 1987 with 20 employees, Raju saw an opportunity in the Code of outsourcing and writing. He was a member of the Board of Naandi, an NGO based in Hyderabad, which did a brilliant job in providing drinking water in rural areas and providing midday meals to more than one million school children across India. Byrraju Foundation also runs the name of his father, and an emergency ambulance service that has gained notoriety worldwide. Satyam cmputer Services Ltd. "The truth is as old as the hills," said Mahatma Gandhi, then a company called Satyam (Truth in Sanskrit) has inspired confidence, Satyam Computer Services Ltd. was founded in 1987 by B. Ramalinga Raju. The company provides information technology (IT) covering various sectors and trades on the NYSE and Euronext Exhcnage. Satyam's network spans 67 countries on six continents. The company employs 40,000 IT professionals across development centers in India, U.S., UK, UAE, Canada, Hungary, Singapore, Malaysia, China, Japan, Egypt and 'Australia, serving more than 654 companies worldwide, 185 of whom are Fortune 500 companies. Satyam has strategic technology and marketing alliances with over 50 companies. Apart from Hyderabad, which has development centers in India, Bangalore, Chennai, Pune, Mumbai, Nagpur, Delhi, Calcutta and Vishakhapatnam Mr. Bhubneshwar chronology Satyam Year Number of events 1 1987 states Ramalinga Luis Satyam Computer Services Ltd 2 1991 Satyam listed on the Bombay Stock Exchange, the IPO oversubscribed 17 times. 3 2006 The Cross '1 revenue billion. "Luis is President NASSCOM. 4 Luis called 2007 Ernst & Young Entrepreneur of the Year. 5 September 2008 23 Satyam awarded the Golden Peacock Award for Corporate Governance and Compliance. 16 December Satyam Chairman Ramalinga Luis Mayta announces plan to buy properties Mayta Infra and his son for $ 1. 6 billion. December 17 Louis made a U-turn because of the negative reaction of investors December 23 Satyam banned business with the World Bank for 8 years for alleged crimes in obtaining contracts. Shares fall to lowest in 4 years. December 25, Satyam World Bank calls for an apology December 26 Council members resigned Mangalam Srinivasan, followed by members of Vinod Dham, Krishna palepu. . December 30 one of the largest investors in Satyam said it might sell its stake. More candidates to join the battle to acquire Satyam. 6 January 2009 2 game Satyam, said its founder, was reduced to 5 third. 13%. I Satyam January 6 Sebi meets DSPML bank, reports irregularitites Accounting Ramalinga January 7 Luis resigns, reveals a fraud Rs 7000-crore accounting balances in the money that has never existed in the company. January 8, Satyam Citibank freezes 30 accounts. Acting Director General said Ram Mynampati company in serious liquidity crisis and may not be able to pay salaries. Satyam IRE auditor PwC faces. January 9 Ramalinga Raju and his younger brother Louis B Rama arrested by police. Satyam Central Govt dissolves the Board to appoint its own administrators 10. Satyam's largest investor of 10 January Lazard seeks a nomination board. SEBI Networks Raju. New Satyam January 11 Board announced Mr. Deepak Parekh, Kiran Karnik and C Achuthan appointed as Board members Feburary 5 AS Murthy appointed the new CEO of 16 April Company Law Board approved the sale of Tech Mahindra scandal Thurs Satyam — - Satyam, said that, ironically, means "truth" in Sanskrit, was founded in 1987 with 20 employees, Raju saw an opportunity in the Code of outsourcing and writing. In a period of time activity is booming. Andhra Pradesh, of which Hyderabad is the capital, is one of the largest reservoirs of skilled manpower in India. Satyam Doughty would be a competitor to its rivals, the prices of their services so aggressively that some thought he was ready to go with minimal benefits in order to win customers. She has expanded aggressively overseas. When he opened his office in Sydney a few years ago, occupied the premises vacated by a global IT farms. In China, provincial leaders competed to invite Satyam to establish operations in their regions. But when Mr. Raju sold shares to the public in India in 1992 and later opted for a listing in New York in 2001, has increased the pressure on him to improve business performance. Always competitive, was also in the race to reach the market leaders, Tata Consultancy Services, Infosys and Wipro Technologies. Luis was haunted by the last mark of one billion dollars in sales. When he got there, it would save U.S. $ 2 billion. New Satyam USD 2. 1 billion ($ S 3. 1bn) in sales in the year to 31 March 2008. With increasing pressure to do, Satyam Doctoring the books began to show higher profits, a process that began several years ago. For Satyam, recent developments are a direct relic of the past. In fact, the story is about ten years. In late 1999, IndiaWorld - an Internet company largely unknown - was acquired by Satyam Group Company, Satyam Infoway, an eye-popping Rs 500 crore. The consternation that has accompanied this operation was not difficult to understand. IndiaWorld had a topline of Rs 1 million Rupees only and net profit of Rs 25 Lakh negligible. 500 crore rupees, Satyam Infoway, later renamed Sify, should pay the astronomical sum, not only for IndiaWorld but for a number of sites that came with it - among them Samachar. com, Khel. KHOJ com. com. The argument was distributed based on the business potential of the Internet and the logic of evaluation eyes driving history. Money they were not sure of the source of funds and much again Ramalinga Raju. A few months later, in 2000, the shareholders of Satyam were an angry lot. At the Annual General Meeting (AGM) of the company in Hyderabad in May 2000, shareholders of the retention of facts and Satyam accused claimed they were misled. It was after the merger of three subsidiaries - Satyam Enterprise Solutions (SESL), Satyam Satyam Renaissance Consulting Solutions and Spark - with Satyam Computer Services. Fusion Post, 8 lakh shares of Satyam Computers have been attributed to C Srinivasa Raju, who was then CEO of Satyam Computers. Shareholders said SESL had made a rights issue of 12 lakh shares at par, just before the merger. A third of them was acquired by Satyam Computer, while the other 8 Lakh shares Srinivasa Raju has done well after he resigned. Once shareholders SESL received shares of Satyam Computers at a ratio of 1:1, Mr. Raju has won 8 lakh shares of Rs 10 per share only when the shares were trading at a huge Rs 1,600. The management of Satyam Computers, however, argued that things are above board, if shareholders thought otherwise. From several quarters the seed of the accounting manipulations at Satyam Ramalinga were planted before Luis notified to the Council on Wednesday, January 7-09. In 2002, the Department of Company Affairs (DCA) has held a series of complaints from the shareholders of Satyam were accounting irregularities at the company. Here, said directors of Satyam unwisely invested in subsidiaries which have been underperformers. This only facilitated the process of tax evasion and use of methods such as the cancellation of large amounts of depreciation. At first glance, the statement of Luis de la commission in which he admits to inflating profits, seems an act of contrition by a man who was willing to stand and face the music of their transgressions. If Bob is wearing the baseline, only to stimulate the recovery of the company and ensure that they remained at the forefront of IT services. Raju further evaluation may also borrow more money against their shareholders. But where does the money come? Luis said that Satyam profit growth for many years. . . Inflating the cash and bank balances of Rs 5.040 billion rupees (5,361 crore from Rs recorded in the books) Interest accrued of Rs 376 million rupees is not zero liability of Rs 1.230 billion rupees has been underestimated because of funds deposited in the ego position of expenditure "of Rs 490 million rupees is exaggerated (cons Rs 2651 reflected in the books), but if this Rs 7000 crore … strange no How were the salaries of 53,000 employees to pay with a company that apparently survived for only 3 percent operating margin? The employees were on the bench (as found)? Luis had inflated earnings by strengthening the evaluation of Satyam, and borrow money pledging their shares? . . . But if the money is there. . . Dated Adjus Satyam use the funds to build a land bank of over 6,000 hectares across a network of companies not listed? What happened to the funds raised? There was a problem in the ADR 2001, in which Satyam raised Rs 753 million rupees and March 31, 2002, Satyam became almost zero debt company at Rs 431 million rupees unused portion of the amount of products ADR was the king of Satyam Satyam If benefits have been avoided, where were the funds for all purchases of cash? Year Mr. No. Signature of financing acquisition of Occupancy ($ amount) April 1-05 UK-based Business Consulting Firm Citisoft PLC 38mn (paid in installments) 2 July-05 Madrid-based knowledge Dynamcis Solution Consulting Provider 3. 3 MN (all cash transactions) October 3-07, based in the UK Nikor global solutions of basic infrastructure services and management consulting 5. 5 min (all cash transactions) January 4 to 08 with headquarters in Chicago Bridge Stratergy Enterprise Management Group Consulting 35. 00 min (all cash transactions) April 5-08 Caterpillar Inc. market research and analysis of customer transactions 95. 5 min of the two offers (cash purchase) S & V Management Consultants Supply Chain Management FRIM The fall of the fall of Louis Louis began at 08 in diciembre Satyam When he tried to acquire two companies controlled by his son - Mayte (Satyam spelled backwards) Mayta Properties and Infra - for 1. 6 billion dollars to compensate for holes in their books. The operation was withdrawn 12 hours after it was announced as investors have objected, saying it was an irresponsible misuse of funds and a case of nepotism. Offers Mayta has acted as a red flag for international investors, with a multitude of corporate systems, such as unpaid Satyam Britain accused of fraud, forgery and violation of contract. Shortly afterwards, on 23 December, the World Bank bans Satyam to provide services for eight years, citing a possible path of corruption - data theft and corruption - led to Raju. The last straw may have come January 09, when an Indian partner of Merrill Lynch to end an agreement based on "material accounting irregularities. The role of auditors, there is much debate about the role of PricewaterhouseCoopers, external auditors of the company in liquidation of Satyam. Auditors should be monitored, verified the cash balances, bank statements, the assets of corresponding confirmation. Satyam has been a great company, not a high street store, PricewaterhouseCoopers is a firm of international repute. The auditors can not hide under the standard clause "Auditors may be vigilant and not bloodhounds," especially when cash balances and the Bank have been exaggerated. Role of Directors The Companies Act of India has stringent corporate governance requirements for board members. However, Luis was able to keep the accounts made by members of the board of 6 years! This surprised the industry and regulators. Sometimes, the company had a cash surplus, such as books. This should have led to questions from members of the board of directors. In particular, the independent directors who are appointed by shareholders, at the request of the Council are selected on the basis of their reputation, knowledge and wisdom. They are the first line of defense of minority shareholders. In general, they provide expertise. The independent directors must meet the standards set by the exchanges as well. The Indian government specifically define the role of independent directors to safeguard the interests of the organization and shareholders. An independent director should normally assume that the audited accounts have been carefully examined. This is even more when an international auditing firm Pricewaterhouse Coopers as credible, verified the numbers. But they must follow the right questions and probe. Sitting on many boards compresses the time for an independent director must consider what is happening inside the belly of a company. The facts relating to insider Raju said nobody at the company was aware of the sinking of the accounts. But the facts speak otherwise. BSE figures show a number of elderly in society, including CFO Vadlamani Raju and have sold some of Satyam in the last 22 quarters. No. Name of father last year in Officail Satyam / Number of shares sold 1 Ramanlinga Luis Jun-2001 23. 0% Dec-2001 22. September 4% 2002 21. 6% 2003 19. 0% 2004 16. 0% 2005 14. 0% 2006 11. 0% 2008 8. 27% 2 Vadlamani (then CFO) 92,538 shares of 3 RAM Mayanpari (then) CEO 7,00,000 shares and ADRs kiran 4 2.50.000 cavale 4,00,000 shares and 10 000 ADR's 5 Rajan Nagarajan 4,30,000 share and 70,000 ADRs Once fraud Satyam Ramalinga Investgated Louis confessed to the fraud departments of all the government began investigating the fraud. Departments include CBI, SFIO, SEBI, RBI and ICAI. CBI reveals the modus operandi of the Satyam cyber fraud using forensic techniques, the IWC has broken the modus operandi of the fraud Satyam. Here are the conclusions of the CBI to certain areas: Mr. No Comments Zone 1 Data IT company generated sales of fake invoices to show sales inflated. 7561 bills were found hidden in the bill management system. The accounts amounting to Rs 5.117 billion rupees. The accused has already reached 6603 of them, an amount of Rs 4.746 million rupees. 2 Claims bills Fraud has led to the creation of exaggerated claims 3 Investment term deposits showed that the fixed deposit receipts (FDRS) worth millions of rupees were printed wrong and his personal motto. The FDR showed large amounts of counterfeit, such as interest on these deposits is estimated at more than 375 crore rupees, against the average effective interest of Rs 7. 42 Lakh only. 4 Guarantee Bank has manipulated the bank guarantees bank accout balance show that RS 1800 crore 5 Balance of bank accounts of counterfeit bank documents showing the existence of a cash balance in five banks, including ICICI Bank, HSBC, Citibank and BNP Paribas bank, but said he did not pay in cash, on behalf of the company. 6 Who were the names of all involved CBI chargesheet Ramalinga Raju, Rama Raju, Suryanarayana Raju, V. Srinivas, S. Gopalakrishnan, T. Srinivas, G. Ramakrishna, D. Venkatapathi Raju, and C. Srisailam. The revelations about the serious research-Fraud Office (SFIO) government, January 13, SFIO had launched an investigation into various aspects of corporate fraud under Article 235 of the Corporations Act. The SFIO is a multidisciplinary organization created in 2003 to investigate serious financial fraud. It consists of tax professionals, accountants, fraud inspectors, experts and professionals in the bank's capital market. These are the findings of the Commission of any box SFIO Sr. Notes 1 The main areas of inflation inflation was mainly in six accounts, is counterfeit cash and bank balances, showing IFD of fiction, which shows the notional interest obtained in these framework decisions, showing understate liabilities and also by showing the excessive spending. 2 Exports inflated to the tune of more than Rs 4500 crores during the past 7 years 3 Currency Amount Rs. 1940 crore has not yet paid Rs 4 Books Books inflated with air. 27.167 million rupees 5 What is your Thisbe Fy 01 to 08 September 6 reasons for the same billing system of fraud mismanagement and poor accounting practices 7 Accounting software flaws in accounting software and passwords are not committed to facilitate fraud. software management functions of financial accounting firm was deliberately made it very difficult to inflate profits 8 Invoice Management System weak password protection to make the system vulnerable to abuse. Therefore, the false invoices can be created by unauthorized users. To balance these collections of false invoices, which first appeared as income in the current account at the Bank of Baroda, New York Branch and subsequently found to be transferred to other bank accounts and term deposits. There was no validation controls on a series of bills. The report said SFIO to combat the serious deficiencies in the system that the seizure of unauthorized transactions provided, unauthorized payments and the inability to detect unauthorized activities. 9 deposits were fixed promoters regulate the generation of confirmation letters false balance quarterly indicating the amounts of deposits and interest earned on them. These streams of false statements and balance confirmation letters have been entered into the accounting software Satyam Oracle Financials for quarterly audits of the company. 10 accounts current three bank accounts in India, Citi Bank, HDFC Bank and HSBC have also been used for counterfeiting current account balances. SFIO in its report on fraud Satyam, said the allegations of the information society deposit of funds raised through American Depository Shares in 2001 banks could not be verified. Satyam in 2001 through a public offering in the United States raised Rs 760 million rupees, and said the amount to Citibank, New York. Although the company claimed that it has transferred Rs 397 million rupees in India, the SFIO report says he was mistakenly listed as being transferred to India and the effective use of this amount has been found is that all funds have been transferred account to some unknown accounts through Citibank, Bahrain. Now, Satyam Tech Mahindra Tech Mahindra and Larsen & Toubro hair Wilbur Ross Group to claim success Satyam Computer fraud. According to initial reports, on Monday, Tech Mahindra is paying Rs 1.757 million rupees for a 31% stake in the company, or 58 rupees per share. Satyam Computer Services has expanded by 15% at Rs 54. 20 Before the announcement of the winning bid for the company April 13, 2009. The conclusion of the saga of Satyam can be found in the pages of a few. The truth is yet to be revealed. The only truth we now know that nearly 2 million dollars of wealth that belonged to 3 Lakh eroded shareholders in a week, 53,000 jobs on the line, the shareholders of the drop of a positive net worth Rs 8.529 million rupees to Rs negative Rs 278 million only by the greed of some people. But one thing is true, there was no fraud, things have been treated for over seven years in her major Satyam Computers could be a "masterpiece", if you gave was not an improper purpose, planning and implementation every detail is truly admirable. But still wondering what he was thinking of Louis, since when and why they feel this way, and how has he done?