In this blog post, Hitender Sharma, a member of the Bar of the District Court Mandi Town, Himachal Pradesh and currently pursuing a  Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses the effect of the Satyam scandal on Corporate Governance strategies in India and the resulting changes to these strategies. In the process, Satyam grossly violated all rules of corporate governance[16]. In addition, the Corporate Governance framework needs to be first of all strengthened and then implemented in “letter as well as in right spirit”. During the year 1996, company promoted four subsidiaries including Satyam Renaissance Consulting Ltd, Satyam Enterprise Solutions Pvt. Business transparency should be the key to promoting shareholder trust. The primary goal of this inquiry will be to make the case for bringing together two very extensive de-bates – within stakeholder theory, on the one hand, and within public management, on the other – that Mr. Raju admitted that the fraud which he committed amounted to nearly $276 million. Questions were raised on the corporate governance practices of Satyam with analysts and investors questioning the company’s board on the reasons for giving consent for the acquisition as it was related to party transaction. In 2010, SEBI amended the Listing Agreement to include the provision dealing with the appointment of a chief financial officer, In 2013, the Indian Company Law was amended, and it  incorporated the following  provisions:-. written by Avdhesh Parashar student of Maharashtra National Law University Aurangabad It planned to acquire 100% and 50% stakes in Maytas property and infra for $1.6 Billion. He further stated that “it was like riding a tiger, not knowing how to get off without being eaten,” “The aborted Maytas acquisition was the last attempt to fill the fictitious assets with real ones.”. The management of the company assumes the role of a trustee for all the others. Senior partners S Gopalakrishnan and Srinivas Talluri of the auditing firm Pricewaterhouse Coopers (PwC) were arrested for their alleged role in the Satyam scandal. First, forensic accounting skills have become very crucial in untangling the complicated accounting maneuvers that have obfuscated financial statements. A week after Satyam founder B Ramalinga Raju’s scandalous confession, Satyam’s auditors Price Waterhouse finally admitted that its audit report was wrong as it was based on wrong financial statements provided by the Satyam’s management[9]. An auditor cannot perform non-audit services for the company and its holding and subsidiary companies. Good corporate governance is one of the important criteria for the Investors including foreign investors for taking an investment decision in the company. The companies are merged legally on 25 June 2013. Here, the Rajus’s had a 37% stake. SEBI’s committee on disclosure and accounting standards issued a discussion paper in 2009 to deliberate on. As of December 2008, Satyam had a total market capitalization of $3.2 billion dollars. In one of the the biggest frauds in India’s corporate history, B. Ramalinga Raju, founder and CEO of Satyam Computers, India’s fourth-largest IT services firm, announced on January 7 that his company had been falsifying its accounts for years, overstating … 649crore. February 2009: CBI filed three charge sheets basing on the investigation. Satyam Computer Services Limited was formed in 1987 in Hyderabad (India) by Mr. Ramalinga Raju. (Pioneer, February 20, 2009, p 10), [13] The marquee list of bidders included engineering firm L&T, billionaire investor Wilbur Ross, IT services firm Tech Mahindra, B.K. Shareholders expect transparent dealing in an organization. Good corporate governance makes sure that all shareholders get a voice at general meetings and are allowed to take an active part. Near about six years after the Rs. On December 16, 2008, Satyam’s Board cleared the investment, but investors opposed it. The Satyam scandal also effected sweeping changes in auditing practices. For instance, thousands of employee jobs were on the line. Ltd., and Satyam Infoway Pvt. Ramalinga Raju, a management graduate from Ohio University, founded Satyam Computer Services Ltd., a Hyderabad-based software Company in 1987. © Copyright 2016, All Rights Reserved. CBI special court found B. Ramalinga Raju, founder and CEO of Satyam Computers along with nine others guilty of criminal conspiracy and cheating among other offenses and  awarded 7 years imprisonment. • Satyam Computer Services zoomed 15% to Rs 54.20 ahead of the announcement of the highest bidder for the company on April 13, 2009. Modi promoted Spice Group and IT services firm Cognizant Technologies. The chairman of Satyam is Ramalinga Raju. Junk Bond fiasco of USA and failure of Maxwell, BCCI and Poly peck in UK resulted in the beginning of codes and standards on corporate governance. The USA, UK and number of other developed countries reacted strongly to the corporate failures therefore codes & standards on corporate governance came to the centre stage. When an apple is rotten there is no cure, but at least the rotten apple can be removed before the infection spreads and infects the whole basket. The lone independent director since 1991, US academician Mangalam Srinivasan, announced resignation followed by the resignation of three more independent directors on December 28 i.e. acquire as Satyam’s ADRs plunge by 55% in the US. The major issues that the management faced in the Satyam scandal was that there was not a lot of clarity regarding the actions of the Company and its management and still people did not even once raise the question. On January 8, 2009, Citibank freezes Satyam’s 30 accounts. Prior to that Raju made an attempt to have Satyam invest about Rs. Audit committee has to accommodate a majority of independent Directors. It also stated that the company’s revenue was 2.1 billion dollars. These countries reacted strongly to the corporate failures and codes & standards on corporate governance came to the centre stage. Directors went ahead with the problems that result from the actual Rs tip of the of... 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