Project on Satyam Scam

1395 WordsSep 7, 20096 Pages
Name: Mr. Hiten S. Panchal Std.: M.M.S. – I Div.: A Roll No.: 643 Sub.: Marketing Applications & Practices Project: Satyam Saga SATYAM SAGA Introduction: On 7th January, Wednesday, Satyam Computer Services Chairman B Ramalinga Raju resigns and disappears after confessing to the largest fraud of Rs. 7,136 crore in Indian corporate history. He admitted to committing a gigantic fraud that shook corporate India and the stock markets to the core. In a letter to the board, Raju, 54, unburdened his conscience and admitted that there was a huge hole in the company’s balance-sheet created by reporting “inflated profits over a period of the last several years.” He tried to fill this “gap” by announcing the merger of Satyam, India’s…show more content…
Satyam Stock lost 77% of value in Indian stock market. Satyam was replaced by Reliance Capital in the Nifty. BSE removed Satyam Computers from Sensex and replaced it with Sun Pharma. This has not only affected to the public & investors’ confidence but also our countries image too. There was major goodwill loss as Satyam was fourth largest IT company of India. 3) This has lead to major financial losses to many FIIs and Mutual funds along with Companies like L&T lost crores of money in Satyam stock. The companies like Sundaram BNP Paribas, ICICI Mutual fund, HDFC Mutual Fund, Tata Mutual Fund, Franklin Templeton Mutual Fund lost huge money in Satyam Computers. LIC’s estimated loss was more than Rs. 1500 crores in Satyam Computers. 4) It has impacted the business a lot With the Satyam fiasco questions are being raised over the reliability of the company and major international clients are looking out at other vendors to move their projects too. Major clients of Satyam Computer Services, such as General Electric (GE), Nestle and British Petroleum, have started exploring alternative options such as moving work to other outsourcing vendors. Satyam’s World Bank Project was given to TCS. Lessons Learnt: 1) A lack of business ethics creates problems not just for the economy but the polity as well. India incorporation has to focus on accountability and ensure ethics in business. If the corporate sector commits itself to certain norms of

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