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 1.4 billion.
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.
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About the Satyam Scam
- Ramalinga Raju, founder, and CEO of Satyam Computers, a Hyderabad-based software Company had accepted falsifying its accounts
- In February 2009, the Central Bureau of Investigation (CBI) took charge of the investigation and filed three charge sheets
- 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 of this accounting fraud. Raju and others were sentenced to 7 years of Rigorous Imprisonment. Raju and his brother, one of the other nine accused, were also charged Rs.5.5 crore each
In the year 2018, the Securities and Exchange Board of India (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.
IREDA Received Golden Peacock Global Award For Excellence In Corporate Governance Companies Law Committee submits a report to Government Indian Companies Act.
Read about the Indian Renewable Energy Development Agency (IREDA) and its functions at the linked article.
About the Company – Satyam Computer Services Ltd.
- The company was founded in 1987
- It catered to the IT needs of various sectors like Healthcare, Bio-Tec., Telecommunication and Media, Automotive Banking & Finance, etc.
- It was one of India’s best Information Technology Companies and by 2008 had revenues of over $2 billion with more than 50,000 employees
What is Corporate Governance?
Corporate governance is the system of rules, practices and processes by which a firm is directed and controlled. Managing the interests of a Company’s stakeholders, management, customers, finances, government and other related authorities comes under corporate governance.
With the increasing globalisation, the requirement for corporate governance has also increased. The expectations from the present corporate sector are higher and thus, it becomes more essential in modern times.
Know the Difference between Globalisation and Liberalisation at the linked article.
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