In this article, we give you a brief summary of the Satyam Scandal that rocked India’s corporate world in 2009. This is important from the point of view of commerce and corporate governance, subsections of the economy as well as governance segments in the UPSC syllabus. This will also help in essay writing for the IAS exam.
The Satyam Computer Services scandal took place in 2009 when the company’s then chairman Ramalingam Raju resigned and confessed to having falsified the company accounts to the tune of USD 1.4bn. In February 2009, the Central Bureau of Investigation took charge of the investigation and filed three charge sheets. Later, they were all clubbed into one. The public company was then removed from the Nifty and the Sensex. Its board was removed and the government appointed its own board. Tech Mahindra then bought the company and gave it a new identity, Mahindra Satyam. This company ceased operations in 2013 when it merged into its parent Tech Mahindra. A total of ten people were found guilty and convicted in this accounting fraud. Raju and others were sentenced to 7 years Rigorous Imprisonment. Raju and his brother, one of the other nine accused, were also charged Rs.5.5 crore each.
In the year 2018, SEBI barred Satyam’s auditor Price Waterhouse from conducting any audits of any listed company in India for two years saying that the firm was complicit in the Satyam fraud case.
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