CASE STUDY 3-1 THE MERGER OF TECH MAHINDRA AND SATYAM COMPUTER SERVICES

A Task Force has been formed in the last few days to address the situation arising out of the failed Maytas acquisition attempt. Over documents and witnesses were parsed over the past 6 years. Apart from improving disclosure standards, re-auditing norms, and greater shareholder activism, there is also a need to counter corruption. The Price Waterhouse received an annual fee of Rs. The board hurriedly reconvened the same day a meeting and called off the proposed investment. Now, it is amply clear that the Satyam scam was plotted at the top and driven by Ramalinga Raju and his brother. The investigators had used cyber forensics to uncover how in-house computer systems were exploited to generate fake invoices.

The company had total assets of Rs. What was the need to commit a fraud on such a large scale? Making up ghost employees might sound complicated, but investigators said it was not that difficult. This target can be motivated by a preference for more stable earnings. Abuse of Creative Accounting Practices at Satyam: Raju created numerous bank statements to advance the fraud. This was a formula that Raju had been using for a while.

These two sets included confirmations actually sent by banks directly to the auditors the genuine ones in the prescribed format, and confirmations through forged letters purportedly sent from various bank branches, but forged. But the position is reversed when we look at how the wrongdoers in the two companies have been treated in the respective countries—India and the US Vasudev, After creating fake invoices and generating false revenues, the next step was to show these as cash receipts.

The Crisis exposes all the flaws.

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Analysis: Tech Mahindra-Mahindra Satyam merger | Business Standard News

The investigation also implicated several Indian politicians. The SEBI requires the Indian publicly held companies to ensure that independent directors make up at least half of stuey board strength. Satyam has established an excellent leadership and competency base at all levels. The Price Waterhouse received an annual fee of Rs.

Mahindra Satyam Merger with Tech Mahindra: Arriving at the Share Exchange Ratio

Dear Board Members, It is with deep regret, and tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice: From the above, an intriguing question that arises here is: Most of the sales seemed to have taken place after Satyam failed in the bid to acquire Maytas Infra and Maytas Properties.

Bhasin described it as: The global head of internal audit also forged board resolutions and illegally obtained loans for the company. He found that CA is influenced by two key motivators: Ramalinga Raju, the man who knew too much, gets 7 years in jail, April Krishna Palepu 10, 1.

Operating Performance of Satyam Rs.

case study 3-1 the merger of tech mahindra and satyam computer services

I have seen it grow from few people to 53, people, with Fortune companies as customers and operations in 66 countries. A Task Force has been formed in the last few days to address the situation arising out of the failed Maytas acquisition attempt.

Satyam also under- reported liabilities on its balance sheet and overstated its income nearly every quarter over the course of several years in order to meet analyst expectations. The basic motto was to inflate the share prices of the company and subsequently, sell the promoters holding at the inflated prices.

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Talluri, partners of PwC had admitted they did not come across any case or instance of fraud by the company. None of the board members, past or present, had any knowledge of the situation in mayindra the company is placed.

How does this keep on happening for five years, without any suspicions? Ramalinga Raju 98,25, Now, it is amply clear that the Satyam scam was plotted at the top and driven by Ramalinga Raju and his brother.

case study 3-1 the merger of tech mahindra and satyam computer services

What followed in the last several days is common knowledge. The board hurriedly reconvened the mergger day a meeting and called off the proposed investment. What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years.

Analysis: Tech Mahindra-Mahindra Satyam merger

Investigation revealed that all the invoices that were hidden using the Super User ID in the Commputer server were found to be false and fabricated. Here, Bhasin a commented as: Satyanarayana Raju 0 0.

Mahindra Satyam Merger with Tech Mahindra: As the promoters held a small percentage of equity, the concern was that poor performance would result in a take-over, thereby exposing the gap.