Presentation on theme: "Corporate. Exemplary Golden Peacock award – world council of corporate governance – September 2008 Enterpreneur of the Year – 2007 – Ernst & Young Asian."— Presentation transcript:
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
Beginning of END India’s 4 th 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 7 th Jan-2009 – Confession by Raju
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.
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
CSR Byrraju Foundation Satyam Foundation EMRI Emergency call no. 108 in 8 states Mobile Health service 104 in Andhra rural villages
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
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