Review on Failure of Cg in Satyam
Introduction to Satyam Computers Limited
Satyam computers limited established as a private limited company by two brothers B. Rama Raju and B. Ramalinga Raju in 1987. It was converted to a public limited company in August 1991. By 2008, Satyam was established as a fourth largest Indian IT Company in India and US. It had grown upto 53000 employees, 600 plus customers including 185 fortune 500 companies. The company had annual revenues over $2 billion. The company was operated in more than 66 countries across the globe. Satyam had received Global Peacock Award for the excellence in corporate governance in the years 2002 and 2008. The company had the Pricewaterhouse Coopers. In 1999, different subsidiaries of Satyam were merged with Satyam and Satyam was listed in NASDAQ. The bankers of Satyam were Citibank, BNP Paribas, HSBC and HDFC.
This was one of those few companies in India that supposedly had been doing things the right way i.e., the Western way. It allegedly had all the checks and balances a U.S. company would want in an overseas business partner. Its financial statements received repeated clean bills of health from a respected outside auditor, PricewaterhouseCoopers. And still its corporate governance rotted away from the inside.
Appearance of Symptoms to crisis in Satyam
In September 30, 2008, Satyam reported that it had cash reserves of US$ 1.2 billion. In December 16, 2008 Company announced that it planned to use these cash reserves to acquire two companies Maytas Infra and Maytas Properties. Satyam announced acquisition of two companies - Maytas Properties and Maytas Infrastructure for US$ 1.6 billion. Investors questioned the company's board on the reasons forgiving consent for the acquisition as it was a related party transaction. Due to adverse reaction from institutional investors and the stock markets, the deal was withdrawn within 12 hours. However, this action did not pacify the anger of the investors. As a result of which the share price
Satyam computers limited established as a private limited company by two brothers B. Rama Raju and B. Ramalinga Raju in 1987. It was converted to a public limited company in August 1991. By 2008, Satyam was established as a fourth largest Indian IT Company in India and US. It had grown upto 53000 employees, 600 plus customers including 185 fortune 500 companies. The company had annual revenues over $2 billion. The company was operated in more than 66 countries across the globe. Satyam had received Global Peacock Award for the excellence in corporate governance in the years 2002 and 2008. The company had the Pricewaterhouse Coopers. In 1999, different subsidiaries of Satyam were merged with Satyam and Satyam was listed in NASDAQ. The bankers of Satyam were Citibank, BNP Paribas, HSBC and HDFC.
This was one of those few companies in India that supposedly had been doing things the right way i.e., the Western way. It allegedly had all the checks and balances a U.S. company would want in an overseas business partner. Its financial statements received repeated clean bills of health from a respected outside auditor, PricewaterhouseCoopers. And still its corporate governance rotted away from the inside.
Appearance of Symptoms to crisis in Satyam
In September 30, 2008, Satyam reported that it had cash reserves of US$ 1.2 billion. In December 16, 2008 Company announced that it planned to use these cash reserves to acquire two companies Maytas Infra and Maytas Properties. Satyam announced acquisition of two companies - Maytas Properties and Maytas Infrastructure for US$ 1.6 billion. Investors questioned the company's board on the reasons forgiving consent for the acquisition as it was a related party transaction. Due to adverse reaction from institutional investors and the stock markets, the deal was withdrawn within 12 hours. However, this action did not pacify the anger of the investors. As a result of which the share price