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Corporate

Corporate . Exemplary. Golden Peacock award – world council of corporate governance – September 2008 Enterpreneur of the Year – 2007 – Ernst & Young Asian Business Leader – 2002 by CNBC Excellency in Leadership – 2008 Forst & Sullivan Top Asian Caompany 2005- Forbes

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Corporate

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  1. Corporate

  2. Exemplary • Golden Peacock award – world council of corporate governance – September 2008 • Enterpreneur of the Year – 2007 – Ernst & Young • Asian Business Leader – 2002 by CNBC • Excellency in Leadership – 2008 Forst & Sullivan • Top Asian Caompany 2005- Forbes • Top 13 Best Managed Company 2005 – ATK

  3. Beginning of END • India’s 4th Largest I.T. company, highly respected • 22 days – drama crashed the company and the confidence on Indian success story – investors, regulators, auditors, employees. • 16-Dec-2008 – Shareholders questioned the acquisition of Maytas – for 8000 crores • 7th Jan-2009 – Confession by Raju

  4. What came out sofar • The family owned land banks 5000+acres of rural and 35000 sqyards in city. • Ownership through a web of 327+ companies • Ownership of promoters – diluted over a period of time – 25% in 2001-3.6% by 2009. • Lies on ownership structure of Maytas group • Fictitious cash and Bank balance – 5040 crore.

  5. Behavioural scientists • Hyderabad Metro - Nav Bharat Consortium lowest bidder for Haydrabad metro -1240 crores – for executing and running the project. Sreedharan dismissed as consultant of project by Hydrabad Government for criticising the concept and business model. • Excessive risk taking characteristics – distinction between business risk and betting • Greed – entrenching management control with limited wealth – one needs 51 % to have controlling interest • Diffused ownership • Failure of balance between Leadership, Governenace, accountability and trust

  6. CSR • Byrraju Foundation • Satyam Foundation • EMRI • Emergency call no. 108 in 8 states • Mobile Health service 104 in Andhra rural villages

  7. Failure of checks and balances • Independent Directors (well fed) • Prof Krishna Palepu (Harward Professor)-Rs 1 cr+5000 shares • Vinod Dham – 12 L+5000 shares • Prof Rammohan Rao-Dean ISB – 12 L + 5000 shares • 3 others • Asked right questions for record, got satisfied with silly answers. • Auditors-deliberately missed on basic checks – e.g. balance confirmation

  8. Present status • Berni Madoff Scandal - $50 Billion investment – came to light in December 2008 – Case concluded in June 2008 – 150 years in prison and $170 Billion restitution • Satyam- partial charge sheet filed – forgery and cheating. Other aspects of crime-diversion of fund, misappropriation of fund will come in second phase-expected by october end. • All parties involved – some times focus-less – SEBI, CBI, State CID, SFIO, ICAI. • Fictitious reporting for 7 years – to auditors, regulators, SAS-70 for outsourcing indutries in US. • Class action lawsuit in US – ADR in US

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