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Mahindra Satyam (formerly know as Satyam Computer Services Ltd.) is a consulting and information technology services company based in Hyderabad, India.
Contents |
Overview
Satyam Computer Services Ltd was founded in 1987 by B.Ramalinga Raju[2]. The company offers information technology (IT) services spanning various sectors, and is listed on the New York Stock Exchange and Euronext.
Satyam's network covers 67 countries across six continents. The company employs 40,000[1] 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.
Satyam was plunged into a crisis in January 2009 after its founder, B. Ramalinga Raju, said that the company's profits had been overstated for several years. Finance professionals, however, say that the scam could not have happened without the complicity of company auditors. Satyam had engaged PricewaterhouseCoopers as its auditors over past 10 years. The company's accounts are being restated.
In March 2009 the company announced it would begin soliciting bids from potential buyers.[3]
On April 13, 2009, Kiran Karnik, the MD at Satyam announced that IT services provider Tech Mahindra had offered the highest bid at Rs 58 per share. Tech Mahindra will have to pay a total of Rs 2890 crore for 31% stake in Satyam.[4] and the IT company will have a market cap of Rs 5,666 crore on expanded equity. A US-based investment firm owned by billionaire Wilbur Ross and an Indian construction and IT services firm, Larsen and Toubro were the other bidders. Cognizant Technology Solutions had expressed its interest in a joint bid with Wilbur Ross but backed out at the end.
Controversies
Maytas acquisition
In 2008, Satyam attempted to acquire (Maytas Infrastructure and Maytas Properties) founded by family relations of company founder Ramalinga Raju for $1.6 billion, despite concerns raised by independent board directors.[5] Both companies are owned by Raju's sons. This eventually led to a review of the deal by the government[6], a veiled criticism by the vice president of India[7] and Satyam's clients re-evaluating their relationship with the company[8]. 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.[9] Three members of the board of directors resigned on 29th December 2008.[10]
World Bank
The World Bank had banned Satyam from doing business with it for 8 years due to inappropriate payments to the World Bank's staff.[11] The World Bank accused Satyam of giving improper benefits to its (the Bank's) staff and of failing to maintain documentation to support fees charged for its subcontractors. However, it clarified that Satyam was not involved in incidences of data theft or malicious attacks that had been made on the Bank's information systems. [12]
Upaid lawsuit
UK mobile payments company Upaid Systems is suing Satyam for over 1 billion US dollars on complaints of fraud, forgery and breach of contract.[13]
Accounting scandal of 2009
In addition to other controversies involving Satyam, on January 7, 2009, Chairman Raju resigned after publicly announcing his involvement in an accounting fraud. Ramalinga Raju is currently in a Hyderabad prison along with his brother and former board member Rama Raju, and the former CFO Vadlamani Srinivas.
External links
- ^ a b Satyam fudged FDs, has 40,000 employees: Public prosecutor
- ^ Corcoran, Elizabeth (24 July 2006). "Back-Office Charity" (Reprint). Forbes. http://web.archive.org/web/20070624073711/http://www.satyam.com/homenews/documents/forbes_speak.pdf.
- ^ http://cnnwire.blogs.cnn.com/2009/03/04/scandal-hit-satyam-going-up-for-sale-2/
- ^ http://economictimes.indiatimes.com/Tech-Mahindra-walks-away-with-Satyam/articleshow/4394635.cms
- ^ The Hindu Business Line - ‘Satyam’s independent directors had raised concerns over the deal’ Friday, December 19, 2008
- ^ Centre refers Satyam deal to ROC - (20 December 2008, 0021 hrs IST, PTI) Hyderabad-Cities-The Times of India
- ^ The Hindu : Business : Plain-speak by Hamid Ansari on governance - (Sunday, December 21, 2008)
- ^ Satyam clients likely to re-evaluate contracts - Bibhu Ranjan Mishra / Bangalore December 18, 2008, 0:45 IST - Business Standard
- ^ Satyam investors lose Rs 3300 cr in a day - Press Trust of India (Wednesday, December 17, 2008) (Mumbai) NDTV Convergence Limited
- ^ Fourth independent director M Rao resigns from Satyam - (December 29, 2008, 1812 hrs IST, AGENCIES) Software-Infotech-The Economic Times
- ^ World Bank bans Satyam for 8 years- ITeS-Infotech-The Economic Times - December 24, 2008, 0022 hrs IST, ET Bureau
- ^ The Hindu Business Line : Satyam Computer recoups after sharp slide - Thursday, December 25, 2008
- ^ Old client files forgery lawsuit against Satyam - (15 May 2008, 1001 hrs IST, N Shivapriya, TNN) Software-Infotech-The Economic Times
References
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Wikinews has related news: Former Satyam CEO Raju, his brother and CFO arrested and detained in profit-fraud scandal |
- A.S Murty's mail to Satyam Employees on Cost Cutting
- Are there more Satyam's in making?
- The Official Corporate Website for Satyam Computer Services
- Employees face fallout of Satyam fiasco
- BusinessWeek profile
- The rise and fall of Satyam
- Raju's Statement - Scanned Copy - "Satyam CEO's Letter to its board of directors" - Hyderabad, India, January 7, 2009
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