India’s Enron!!!! The Satyam Scandal
Satyam Computer Services Ltd. was founded in 1987. The company offers information technology (IT) services spanning various sectors, and is listed on the New York Stock Exchange and Euro next.
Satyam's network covers 67 countries across six continents. The company employs 53,000 IT professionals across development centers in India, the United States, the United Kingdom, the United Arab Emirates, Canada, Hungary, Singapore, Malaysia, China, Japan, Egypt and Australia. It serves over 654 global companies, 185 of which are Fortune 500 corporations. Satyam has strategic technology and marketing alliances with over 50 companies. Apart from Hyderabad, it has development centers in India at Bangalore, Chennai, Pune, Mumbai, Nagpur, Delhi, Kolkata, Bhubaneswar, and Visakhapatnam.
In 2008, the company attempted to acquire two infrastructure companies founded by family members of Raju - Maytas Infrastructure and Maytas Properties - for $1.6 billion, despite concerns raised by independent board directors."Maytas" spelled as reverse of "Satyam". Both companies are owned by Satyam's then Chairman Ramalinga Raju's sons. This eventually led to a review of the deal by the government, a veiled criticism by the vice president of India and Satyam's clients re-evaluating their relationship with the company. Satyam's investors lost about INR 3,400 crore in the related panic selling. The USD $1.6 billion (INR 8,000 crore) acquisition was met with skepticism as Satyam's shares fell 55% on the New York Stock Exchange. Three members of the board of directors resigned on Monday 29th Dec 2008.
The turn of events:
Dec 16, 2008: Satyam Computer Services announces $1.6 billion acquisition of 100% stake in Maytas Properties and 51% stake in Maytas Infra, both promoted by Ramalinga Raju and Sons.
Dec17, 2008: Satyam Maytas deal scrapped following shareholders rebellion.
Dec 21, 2008- Govt asks Registrar of...