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Governance Failure at Satyam
Governance Failure at Satyam
SATYAM
GROUP MEMBERS
Arun K S
13020841118
Akansha Mohanty
13020841064
Ankit Uttam
13020841066
Nishigandha sorte
Siddiqui Zeeshan
Taranpreet Kaur
Pankaj
13020841090
13020841104
13020841113
13020841119
Total value of these two companies $1.6 billion. Justification given was
slow down in IT industry and diversification.
Dec 23rd :World Bank suspended Satyam for 8 years for bribery
charges, but denied the allegations
Dec
26th
:Mangalam
Srinivasan
independent
director
since
Dec 28th :board meeting got postponed, IL&FS Trust sold 4.41 million
shares in open market, family stake dilution from 8.65% to 5.13
20
crore
from
13000
non-existent
The BOD agreed with the Maytas without consenting with the
share holders and when the scam broke they distanced
themselves from the scam. So we understand that they should
be more aligned to the companies interest more than the CEO
3. Corporate Governance at
Satyam
Our Analysis
Independent
The
Accountability
PwC was paid INR430 million for auditing which was close to thrice the
fees paid by other IT companies.
PwC should have declined the offer of such huge fees at the very first
place and should have raised a red flag that why Satyam was ready to
pay so much money.
PwC management should have questioned its own employees who were
auditing Satyam.
It should have verified the cash and bank balances properly and fairly.
The only reason why he confessed his crime was because of his
inablility to fill the marginal gap between the actual operating
profit
and
the
one
reflected
in
books
that
had
attained
In his resignation letter he also stated that the MAYTAS deal was
the last attempt to fill that gap but as this didnt happen hence the
gap could not be filled
6. ROLE OF BOARD OF
DIRECTORS IN CORPORATE
GOVERNANCE
of
Absence
1.In
6.Rotation
7.Constitution
More
8. Lessons Learnt