dish network complaints 2009
Satyam-Alls well that ends well
Satyam: all's well that ends well
In Q2, our revenue grew … in part back of a 4 percent volume growth and the depreciation of the rupee against the U.S. dollar … We believe these factors will also improve performance annual range … I would like to emphasize that Satyam is leaving no stone unturned in our efforts to create a solid foundation for our future.
Note for investors from B. Ramalinga Raju, founder and chairman, Satyam Computer Services, when you declare the results of the Company for the quarter ended September 2008
The balance carried from September 30, 2008 inflated (no balance) Cash and bank … The difference in the balance sheet has been solely on account of inflated profits in a period lasting several years (limited only to Satyam stand-alone …)
Note B. Ramalinga Raju The Board of Directors of Satyam dated January 7, 2009
About Ramalinga Luis B
Byrraju Ramalinga Raju (16 September 1954) is the founder of Satyam Computers and was its president until 7 January 2009, when he resigned from the Board of Satyam after admitting that corporate fraud.
For a man who ran India's fourth largest software exporter, Mr. Ramalinga Raju was not a luxury bungalow person.His views of the city of Hyderabad Banjara Hills is an understated two-story structure with parking for more than three or four cars.
Friends who have dealt with the 54 year old chairman of Satyam Computer Services, say it is difficult to know what you're thinking behind a calm exterior. He goes for walks in the morning, but rarely time appears in the swing of the parts of Hyderabad elite.Behind back, sometimes refer to him as "the man with the smile of the Mona Lisa."
Mr. Raju, a native of Andhra Pradesh in southern India, had a comfortable lead: He studied abroad, earning a degree in business management from Ohio State University.
On his return, he began his career with forays into construction. Satyam, was established in 1987 with 20 employees, as Louis saw the opportunity outsourced in the written code. It was on the board of Naandi, an NGO based in Hyderabad, which operates stellar drinking water supply in the rural areas and providing school lunches to over one million in India. Byrraju Foundation also runs the name of his father, and an emergency ambulance service who has won worldwide acclaim.
About Satyam cmputer Services Ltd
"The truth is as old as the hills, "said Mahatma Gandhi, so a company called Satyam (Truth in Sanskrit) inspired confidence, Satyam Computer Services Ltd was founded in 1987 by B. Ramalinga Raju. The company offers Information Technology (IT) covering various sectors, and is listed on the NYSE, Exhcnage York and Euronext.
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 over 654 companies Overall, 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 in Bangalore, Chennai, Pune, Mumbai, Nagpur, Delhi, Calcutta, Bhubneshwar, and Vishakhapatnam
Satyam chronology
Sr.No.
Year
Event
1
1987
Ramalinga Luis provides Satyam Computer Services Ltd.
2
1991
Satyam is traded on the Bombay Stock Exchange, the IPO oversubscribed 17 times.
3
2006
The income of the Cross' $ 1 billion. "Luis becomes NASSCOM President.
4
2007
Luis named Ernst & Young Entrepreneur of the Year.
5
2008
September 23
Satyam awarded the Golden Peacock Award for Corporate Governance and Compliance.
December 16
Satyam Chairman Ramalinga Louis announces plan to buy Mayta Infra Mayta real estate and their children for $ 1.6 billion.
December 17
Luis makes a U-turn by the negative reaction of investors
December 23
Satyam's business excluding the World Bank for 8 years for alleged wrongdoing in obtaining contracts. Shares fall to lowest in 4 years.
December 25
Satyam World Bank calls for an apology
December 26
Member of the Mangalam Srinivasan Board resignation followed the departure of members of Vinod Dham, Krishna palepu ..
December 30
One of the largest investors in Satyam says it might sell its suitors stake.More participate in the struggle to acquire Satyam.
6
2009
January 2
Satyam said that the participation of its founder was reduced by one third to 5.13%.
January 6
I Satyam bank DSPML Sebi meets, reports on accounting irregularitites
January 7
Ramalinga Luis resigns, reveals a 7000-R Fraud accounting crore in the cash balance on that never existed in the company.
January 8
Satyam Citibank freezes 30 accounts. Ram Mynampati interim CEO says company in severe liquidity crisis and may not be able to pay salaries. Auditor PwC faces Satyam anger.
January 9
Ramalinga Raju and his younger brother Louis B Rama stopped by police. Govt dissolves Satyam Central Board, to appoint their own 10 directors.
January 10
Satyam's biggest investor Lazard seeks a council nomination. SEBI grills Raju.
January 11
Satyam New Board announced, Mr. Deepak Parekh, Kiran Karnik and C Achuthan appointed as members of the Board
Feburary 5
AS Murthy appointed as new CEO
April 16
Company Law Board approved the participation sale of Tech Mahindra
The scandal of Satyam – Explanation
Satyam, which, ironically, means "truth" in Sanskrit, was founded in 1987 with 20 employees as Louis saw the opportunity to outsource the written code. Soon, business was booming. Andhra Pradesh, of which Hyderabad is the capital, has a of the largest pools of skilled labor in India. Satyam prove a doughty competitor to its rivals, the prices of their services so aggressively that some thought I was ready to go with minimum profit in order to win customers. And it expanded aggressively overseas. When he opened his office in Sydney a few years ago occupied premises vacated by a more global IT firm. In China, provincial leaders invite competing Satyam to establish operations in their areas. But once Mr. Luis sold shares to the public in India in 1992 and later, passed through the publication of New York in 2001, increased the pressure on him to improve company performance. Always competitive, was also in a race to reach the market leaders, Tata Consultancy Services, Infosys and Wipro Technologies. Louis was obsessed with getting beyond the billion dollar sales mark. When he arrived, he wanted to send U.S. $ 2 billion. Satyam Nine dollars U.S. 2.1 billion (S $ 3.1 billion) of sales in the year to March 31, 2008.With the ever increasing pressure to perform, Satyam began Doctoring books to show the greatest benefits, a process that began several years ago.
For Satyam, the last events are a direct remnants of the past. In fact, the story is about a decade old. In late 1999, IndiaWorld – an Internet company largely unknown – Was acquired by Satyam group company, Satyam Infoway, to an eye-popping Rs 500 crore. The dismay that accompanied this agreement was not difficult to understand. IndiaWorld had a topline of only RS 1 crore and a net profit of RS 25 lakh insignificant. At Rs 500 crore, Satyam Infoway, later renamed Sify, was paying this huge sum, not only for IndiaWorld but for a number of sites that came with it – among them samachar.com, and khel.com khoj.com. The divided argument is based on the potential of the Internet business and the logic of the eyeballs was directed this story of valuation. I was not sure of the source of funds and how much money came back to Ramalinga Raju.
A few months later in 2000, the shareholders of Satyam were a lot of angry. At the annual general meeting (AGM) of the company in Hyderabad in May 2000, the shareholders of Satyam accused of holding events and said they were disappointed. This was after the merger of three subsidiaries – Satyam Enterprise Solutions (SESL), Satyam Renaissance Consulting and Satyam Spark Solutions – with Satyam Computer Services. After the merger, 8 lakh shares of Satyam Computers were assigned to C Srinivasa Raju, who was then CEO of Satyam Computers.
Shareholders said SESL had an emission rights of 12 lakh shares at par just before this merger. One third of this was acquired by Satyam Computer, while the remaining 8 Lakh shares Srinivasa Raju was much after they were waived. Once shareholders SESL were Satyam Computers stock at a ratio of 1:1, Mr. Luis has 8 Lakh shares in just 10 rupees each, when shares traded at a whopping RS 1600. The management of Satyam Computers, however, maintained that things were beyond on board, although shareholders thought otherwise.
From several quarters seed manipulation of accounting in Satyam Ramalinga were planted before the Raju informed the Board on Wednesday, January 7th-09. In 2002, the Department of Company Affairs (DCA) were in receipt of a number of complaints from shareholders Satyam to accounting irregularities at the company.
Here, said directors of Satyam invested unwisely in the subsidiaries that were underperforming. This only facilitated the process of tax evasion and the use of methods such as the cancellation of large amounts of depreciation.
At first glance, Luis's statement to the Board in which he confesses 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, was only to boost the valuation of the company and make sure he stayed in the big league of IT services. A higher valuation Luis also allowed to borrow more money against their participation.
But where did the money go?
Luis says Satyam inflated earnings for many years …
- Inflating cash and bank balances of Rs 5040 crore (against Rs 5.361 million rupees reflected in the books)
- Interest earned of Rs 376 million Rs is absent
- Liability of Rs 1,230 million rupees is underestimated because of the funds provided for by the "I"
- Debtors position of Rs 490 million rupees is exaggerated (as compared to Rs 2651 reflected in the books)
but if this Rs 7,000 million odd rupees are there …
- How were the salaries of 53,000 employees who are paid with a business that allegedly survived in only 3 percent operating margin?
- Employees were more in the bank (revealed)?
- Louis was to boost profits by inflating the valuation of Satyam, and borrow money by pledging their shares?
… but if the money there …
- Is Satyam Rajus use the funds to build a land bank of over 6,000 acres through a network of companies that do not listed?
- What happened to the funds raised? There was an ADR issue in 2001, through which Satyam raised Rs 753 million rupees and 31 March 2002, Satyam became a company almost zero debt to Rs 431 million rupees amount unused funds ADR
Cash was king Satyam
If Satyam was dodging the benefits, where were the funds for all purchases in cash coming from?
Sr.No
Year
Company acquired
Profession
Financing
(Amount in $)
1
Apr-05
UK-based Citisoft PLC
Business Consulting Firm
38mn (payment by installments)
2
July-05
Singapore-based knowledge Dynamcis
Consulting Solution Provider
3.3 Mn (all cash deal)
3
Oct-07
UK based Global Solutions Nikor
Services-based management infrastructure and consultancy group
5.5 Mn (all cash deal)
4
Jan-08
Stratergy based Chicago Bridge Group
Enterprise Management Consulting
35.00 Mn (all cash deal)
5
Apr-08
Caterpillar Inc
Market research and customer operations for Google Analytics
95.5 mn of two operations (cash purchase)
S & V Management Consultants
The management of the supply chain Frim
The fall of Louis
Raju's fall began on 08 December when Satyam tried to acquire two companies controlled by their children – Mayte (Satyam spelled backwards) Mayta Properties and Infra – for $ 1.6 million to offset the holes in his books. The deal was abandoned 12 hours later it was announced as investors objected, saying it was an irresponsible misuse of funds and a case of nepotism. Tenders Mayta acted as a red flag for international investors, with a number of firms as systems of Great Britain paid Satyam charged with fraud, forgery and violation of contract.
Soon after, December 23, the World Bank Satyam banned from offering its IT services for eight years, citing a potential path of corruption – data theft and bribery – That led to Raju.
Perhaps the last straw came on 09 January when an Indian partner of Merrill Lynch reached an agreement on grounds of "irregularities material accounting.
The Role of Auditors
There is an intense debate about the role of PricewaterhouseCoopers, external auditors the company in the clearance of Satyam. Auditors are supposed to have checked, verified the cash balances, bank statements, assets with the relevant confirmations. Satyam is a great company, not a high street store, PricewaterhouseCoopers is a renowned company worldwide. The auditors can not hide under the standard clause "the auditors can be vigilant and not bloodhounds "especially when cash and bank balances have been exaggerated.
Role of directors
The Companies Act of India has stringent corporate governance requirements of the board members. However, Luis was able to direct the goods through accounts of members of its board of 6 years! This has puzzled the industry and regulators. Sometimes, the company was holding too much cash, as for books. This should have invited questions from board members.
In particular, the independent Directors who are appointed by shareholders at the request Board are selected based on their reputation, knowledge and wisdom. They are the first defense of minority shareholders. Usually they bring expertise. The independent directors must meet the standards set by the stock exchanges too. The Indian Government specifically defines the role of independent directors in safeguarding the interests of the organization and shareholders.
An independent director normally assume that the audited accounts have been carefully examined. This is especially when a company with international credibility, such as Pricewaterhouse-Coopers has audited numbers. However, we must still ask the questions correct and the probe. Sitting on numerous boards compresses the time for an independent director has to think about what is happening inside the belly of a company.
The facts about insider
Louis has said that nobody in the company had knowledge for fabricating the accounts. But the facts say otherwise. BSE figures show a number of senior people in the company, including CFO Vadlamani Raju and were selling Satyam's shares in the last 22 quarters.
Sr.No.
Name Officail
Year
Participation in Satyam / No. of shares sold
1
Luis Ramanlinga
June-2001
23.0%
Dec-2001
22.4%
Sep-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
3
Ram Mayanpari (then CEO)
7,00,000 shares and 2,50,000 ADR
4
Kiran cavale
4,00,000 shares and 10, 000 ADRs
5
Rajan Nagarajan
4,30,000 shares and 70,000 ADRs
Satyam Investgated Fraud
As soon as Ramalinga Luis confessed about fraud, all government began deparments to investigate fraud. The deparments include CBI, SFIO, SEBI, the ICAI and RBI.
CBI reveals the modus operandi of Satyam fraud
Using cyber forensics, CBI has cracked the modus operandi of the fraud Satyam. The following are the results of the CBI to some areas:
No. Mr.
Area
Comments
1
Sales Data
Company to generate false invoices to show sales inflated. 7561 bills were found hidden in the system management of invoices. These bills are worth Rs.5, 117 crore. He already made 6603 of these, amounting to Rs. 4.746 million rupees.
2
Receivable
The billing fraud resulted in the creation of inflated claims
3
Fixed term deposits
Investments identified in the fixed deposit receipts (FDRS) worth crores of rupees were false and printed from your personal device. The false FDRS showed large Quantities such as interest on these deposits is expected to be via RS 375 million rupees, compared to real interest income of Rs 7.42 lakhs only.
4
Bank Guarantee
Bank guarantees manipulated to show accouts bank balance as Rs. 1800 million rupees
5
Balance in bank accounts
Forged bank documents showing the existence of the cash balance in five banks, including ICICI Bank, HSBC, Citibank and BNP Paribas, but clarified that banks have no cash balance in the name of the company.
6
All participants
CBI names Chargesheet Ramalinga Raju, Rama Raju, Suryanarayana Raju, V. Srinivas, S. Gopalakrishnan, T. Srinivas, G. Ramakrishna, D. Venkatapathi Raju, and C. Srisailam.
The revelations of serious Fraud Investigation Office (SFIO)
The government, January 13, SFIO had launched an investigation into various aspects of corporate fraud in Section 235 of the Corporations Act. The SFIO is a multidisciplinary body, created in 2003 to investigate serious financial fraud. It consists of tax professionals, accountants, fraud examiners, the capital market experts and professionals banking. The following are the findings of the Commission of SFIO
No. Mr.
Area
Comments
1
Principal areas of inflation
inflation has occurred mainly in six counts, one is counterfeit cash and bank balances, showing FDs fictitious fictitious showing interest accrued on the framework decisions, showing understated liabilities and debtors also showing exaggerating.
2
Export
Inflated the sum of over Rs. 4500 crores in the last 7 years
3
Currency Remittance
Amount of Rs. 1940 crore is still incessant
4
Books
Books inflated to the tune of Rs. 27.167 million rupees
5
How much time has this
been happening
Fy 01 to 08 in septiembre
6
Reason fraud
Very weak management system and accounting practices bill weak
7
Accounting Software
The gaps in accounting software and passwords are left to facilitate fraud. software system management of financial accounting functions of the company was deliberately very complex for inflating profits
8
System Invoice Management
Weak password protection making the system vulnerable to misuse. Therefore, the false invoices could be created by unauthorized users. To balance the collections against these fictitious invoices, which first appeared as income in the current account at the Bank of Baroda, New York Branch and subsequently were shown to be transferred to other bank accounts and term deposits. There was no evidence of validation for a number invoices. The report said SFIO to a severe lack of controls in the system that facilitates entry of unauthorized transactions, unauthorized payments and no detection of unauthorized activities.
9
Fixed term deposits
The promoters were regularly the generation of false confirmation letters quarterly balance sheet shows the amounts of fixed deposits and interest earned on them. These false statements of balance current account and confirmation letters are fed into the accounting software Satyam Oracle Financials for the quarterly audits of the company.
10
Current Accounts
three bank accounts in India, Citi Bank, HDFC Bank and HSBC were also used for the purpose of counterfeiting current account balances.
SFIO in his report on the fraud case of Satyam, said that claims in the IT company depositing the funds raised through American depositary shares in banks in 2001 could not be verified. Satyam in 2001 through a public issue in U.S. raised Rs 760 million rupees and said the amount was deposited in Citibank, New York. Although the company claimed that transferred Rs 397 million rupees India, the SFIO report said, it is erroneous to have been transferred to India and the actual utilization of this amount could not be reached with any amounts were transferred from this account to some unknown accounts through Citibank, Bahrain.
"Now, Satyam Tech Mahindra
Tech Mahindra and Larsen & Toubro topped the group by Wilbur Ross to claim fraud affected by Satyam Computer. According to initial reports Monday, Tech Mahindra is paying Rs 1.757 billion rupees for a 31% stake in the company, or 58 rupees per share. Satyam Computer Services has expanded from 15% to Rs 54.20 before the announcement of the best offer for the company on 13 April 2009.
Conclusion
Satyam's Saga can not be concluded in the pages of a few. The truth is yet to be revealed. The only truth we know now is that about 2 billion U.S. dollars of wealth that belonged to 3 Lakh eroded shareholders in a week, the posts 53,000 were working on the line drops shareholders net positive value of Rs 8529 crore to Rs 278 crore negative only by the greed of a few.
But one thing is true if it were not for fraud, matters were handled by more than seven years in her major Satyam Computers could be a "work of art, were it not for a dishonest purpose, planning and execution to the smallest detail is truly admirable.
But still we wonder What was Louis thinking, since when and why I was thinking this way, and how he did?
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