Satyam's Foul Play

mohitrawat

New member
does the satyam's foul play also points out fingure over many other bigger organisations !!!
and what is the future of the employees who used to feel secured while working in big organisation ??
 

vaidyanath

New member
Though Satyam will face certain bad time and the employees may have some tough time, definitly if they continue to put in effort they will get out of the trouble. Also the companies future will depend on the one who would be taking over the company.
 

yshah84

Par 100 posts (V.I.P)
In NYSE Satyam ADS is quoting at 1 cent today...which is the real worth of the stock...I think it will now get mearged with any other IT company...
 

Attachments

  • Press Release_Satyam_Computer_Services_Ltd_070109.pdf
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yshah84

Par 100 posts (V.I.P)
Satyam, the fourth largest Indian IT company, with an employee strength of around 53,000 people, could have had a better story to tell, had not the promoters indulged into accounting malpractices and financial manipulations.

This fact came to light today, when the Satyam chairman and promoter, Mr. Ramalinga Raju, in his resignation letter to the capital market fraternity, brought to fore the mammoth scale at which the company has been manipulating its financial numbers over past eight years. It attributed all its recent actions as attempts to salvage the company from imminent fate.
 

Attachments

  • Satyam Scam - Event Update.pdf
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jagjeevan

New member
Regarding corporate governance:

I have worked on CG projects before (Clause49 implementations) and I believe the SEBI norms, while not as stringent as the US SoX, are not bad.

It must have taken some serious collusion from PwC to make this possible. Unless there is some strict action against PwC - i dont know if auditors will realize their responsibility in high-billing clients
 

deepaksoni

New member
Satyam Auditors, Price Waterhouse, issues a statement late today..Let’s put it in perspective
Friday, January 9th, 2009
In this unfolding Satyam Saga unleashed by Chairman,Ramalinga Raju’s confession on fudging accounts for years,this evening we had their auditors,Price Waterhouse releasing a statement defending their audit of Satyam ,stating it complied with generally accepted auditing standards in India and that there was appropriate evidence to support their audit

They have also ,under the excuse of client confidentiality,refused to give more details

Come on Price Waterhouse !…what Client !? Satyam !?…legally it is the Shareholders (Satyam has over 2 lakh of them) who have reappointed you at the last AGM as the auditors…you have a fiduciary responsibility to them more than to Satyam…so hiding behind the Coat of Client Confidentiality is clearly ill- advised

It would ofcourse be interesting to see what their ‘appropriate evidence’ is.

But let’s put their role in perspective and in context of the last published Annual Report of FY 2007-8

Relevant Extracts from Satyam’s Annual Report of FY 2007-8

Pages 39 and 40

AUDIT COMMITTEE

The Audit Committee consists of 100 percent independent and non-executive directors.There were four Members….Prof M Rammohan Rao,Chairman,Dr (Mrs) Mangalam Srinivasan,Mr T R Prasad,Prof V S Raju….There were seven committee meetings in 2007-8 an were attended by the CFO,Head of Internal Audit and Statutory Auditors as Invitees.The Committee reviewed the adequacy of the Internal Control Systems and Internal Audit Reports and their compliance thereof.

Page 56

Internal Control Systems and their Adequacy…Part of Managment’s discussion and analysis…Important Points

The Internal Audit,an independent appraisal function to examine and evaluate the adequacy and effectiveness of the Internal Control System,appraises periodically about activities and audit findings to the AUDIT COMMITTEE
Internal Audit ensures that transactions are executed and assets are safegaurded
The AUDIT COMMITTEE was constituted as a sub -committee of the Board of Directors and it consists solely of Independent Directors.The committee also holds discussions with statutory auditors,internal auditors and the Management.It also reviews with the statutory auditors the scope and results of the audit
Compliance with Section 404 of the Sarbanes-Oxley Act 2002
Under revised Corporate Governance standards adopted by the Stock Exchanges a Certification has to be made by the CEO and the CFO of the effectiveness of the Internal Control Systems and that they have disclosed any deficiencies and how they were resolved to the Auditors and the Audit Committee
Page 60

Personnel Costs…Part of Managment’s discussion and analysis…Important Points

Personnel Costs were Rs 5045.54 crs ( 62.01% of Revenues ) for an aggregate employee base of 55360 of which 43279 were technical associates,2690 were non-technical associates and 9391 were onsite technical associates

Page 62

Auditors Report to the Members of Satyam Computer Services Ltd

Point 2 : We conducted our audit in accordance with auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement….We believe that our audit provides a reasonable basis for our opinion

Point 4 g goes on to give the auditors unqualified opinion that the financial statements that comprise the Balance Sheet,the Profit and Loss Account and the Cash Flow as on March 31,2008 ,read with the notes give a True and Fair view inconformity with generally accepted accounting principles in India

The Report was signed on April 21,2008 by Srinivas Talluri,the Hyderabad Partner of the Auditors,Price Waterhouse

Page 63

Annexure to the Auditors’ Report

Point 6 : In our opinion,the company has an internal audit system commensurate with it’s size and nature of its business

Page 64

Annexure to the Auditors’ Report

Point 17 : During our course of the examination of the Books and records of the company,carried out in accordance with the generally accepted auditing practices in India,and according to the information and explanations given to us,we have neither come across any instance of fraud on or by the company,noticed or reported during the year,nor have be been informed of such case by the management

Page 68

Balance Sheet

As at March 31,2008 the Total Assets are Rs 7381.31 crs of which Net Current Assets are a whopping 80% at Rs 5916.74 crs…of which yet again Cash and Bank Balances are Rs 4461.68 crs or 60% of Total Assets

Page 73

Schedule 8 Cash and Bank Balances

Of the total Cash and Bank Balances of Rs 4461.68 crs,Current Account Balances with Scheduled Banks is Rs 956.29 crs while Deposits with them are significant at Rs 3317.70 crs.Balances with Non Scheduled Banks in Current Accounts are just Rs 179.78 crs

Pages 80 and 81

Notes to Accounts

Note 15 g lists out 43 banks around the world which are categorised as Non scheduled Banks and which hold Rs 179.78 crs in Current Accounts

SOME OBSERVATIONS

NO BREAKUP OF AMOUNTS AND NEITHER THE LIST OF SCHEDULED BANKS HAS BEEN PROVIDED FOR THE BANK DEPOSIT AMOUNTS OF RS 3317.70 CRS

In light of Ramalinga Raju’s confession yesterday that he has been cooking the Satyam books for years and that there is a Cash Hole of Rs 5040 crs as of September 30,2008,the Critical Question is that as of March 31,2008,were there at all any Genuine Deposits to the tune of Rs 3317.80 crs with Scheduled Banks as stated in the Accounts forming part of Annual Report and which has been audited by Price Waterhouse….If there were ,then this would qualify as ‘Appropriate evidence’ to salvage the auditors to some extent atleast even if such deposits had been managed to be got in by Ramalinga Raju to whitewash his fraud at year end and to throw the wool over the auditor’s eyes…or were Bank Deposit Documents forged ?…Time and Investigation will reveal what really happened

If you peruse the above extracts you will find it really hard,like I do,to believe that the statutory auditors followed generally accepted auditing standards and practises and accounting principles…If they had they would have discovered the Asset Hole….It is equally hard to believe that in performing their roles,neither the Internal Auditors,nor the Statutory Auditors ,nor the Audit Committee of the four Independent and Non Executive Directors had any clue as to what Ramalinga Raju was upto !…unless ofcourse they never perfomed their fiduciary roles !..or never knew how to !…for all you know the presence of the CFO and Head of Internal Audit as Invitees to the Meetings of the Audit Committee may have actually compromised the Independent functioning of the Committee,members of which should have been leading but were instead being led !

Sooner or Later the Statutory auditors, Price Waterhouse will have to disclose the nature of their ‘Appropriate Evidence’ to support their Audit of Satyam and how they cannot be blamed for any recklessness in the Audit for not exposing the Asset Hole of Rs 7000 crs as confessed by Ramalinga Raju yesterday ….Today the Interim CEO,Ram Mynampati, was cleary squirming when facing the Media…but he did confirm that the Cash situation is not very encouraging…so Satyam just does not have any significant monies that it’s accounts show it must have !

As far as suspecting that Satyam does not actually have 50000 + Employees on it’s rolls as it claims…well,actually the Personnel Cost Figure of Rs 5045.54 crs in FY 2007-8 for 55360 employees gives a credible annual average cost per employee of Rs 9.11 lakhs…The question to ask is if any of these 55360 employees do not really exist and are just ‘Benami’…A Cross Check with Gratuity and Pension Records with Insurance Companies and Government Records will confirm bonafides

The unfolding of the Satyam Saga continues…Media has been reporting right through the Day that there is no trace of either the Promoter Chairman, Ramalinga Raju or the CFO,V Srinivas,both of whom have resigned….A lawyer representing Ramalinga Raju claims his client is not absconding and is very much in Hyderabad.

Source: Blog
 

mah_22

New member
satyam mismanagement has come as shock to indian corporate world. the indian corporate world has lost trust bcoz of this issue. it recently won golden peacock award for best corporate governance for 2008.but the practices it adopted nd the accounting fraud in the company came as shock to investors.
 
The letter written by Mr. Ramalinga Raju Former Chairman of Satyam to his Board of Directors of Fraudulented affairs in Company and misleading the world of Investors by inflated Balance sheet
 

Attachments

  • Ramalingaraju%20resign.pdf
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AV0211

New member
I believe satyam will come out of this bad time....
Satyam is leading Indian IT company...
Support Satyam and their associate... Dont believe in Rumours.. and Media Speculation....
 

priyanshu007

Par 100 posts (V.I.P)
but because of this kind of thing done by ramalinga raju definitely create problems for the employees who will pay for this even they are innocent...
it will take time & satyam will make his come back but till time is very for those employees...
 

sameer goyal

New member
any game like this on such a mammoth scale can't be act of one single person. when things go wrong one person sacrifice himself to save others. thats is wat "raju" is doing i think so. M&A market has now started speculating probable satyam marriage but it will take sum deal of time because satyam lost all its goodwill and repo in the market. rumuors says Mayatas' investment in real property will save satyam to some extend.
 

prasadgoa

Prasad Phal
SEBI's intercention will be good or takeover by a giant IT firm will be better...
... which will bring the transperancy
 
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