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    BE Khushboo Chouhan JLU05126

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    Abhishek Bidhan
    This document contains a student's responses to questions regarding the Satyam Computer Services fraud case. In response to the first question, the student explains that while Mr. B Ramalinga Raju began the fraud, over time additional persons within the company's promoters and family were also involved in insider trading and acquiring land through fraudulent means. In response to the second question, the student outlines the major ethical issues relating to finance in the case, including falsifying accounting records, tax evasion, and siphoning money from shareholders. In response to the third question, the student states that the audit and accounting functions at Satyam could have stopped the fiasco if they had not artificially inflated financial statements and the company's share

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    BE Khushboo Chouhan JLU05126

    Uploaded by

    Abhishek Bidhan
    27 views3 pages
    This document contains a student's responses to questions regarding the Satyam Computer Services fraud case. In response to the first question, the student explains that while Mr. B Ramalinga Raju began the fraud, over time additional persons within the company's promoters and family were also involved in insider trading and acquiring land through fraudulent means. In response to the second question, the student outlines the major ethical issues relating to finance in the case, including falsifying accounting records, tax evasion, and siphoning money from shareholders. In response to the third question, the student states that the audit and accounting functions at Satyam could have stopped the fiasco if they had not artificially inflated financial statements and the company's share

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    This document contains a student's responses to questions regarding the Satyam Computer Services fraud case. In response to the first question, the student explains that while Mr. B Ramalinga Raju began the fraud, over time additional persons within the company's promoters and family were also involved in insider trading and acquiring land through fraudulent means. In response to the second question, the student outlines the major ethical issues relating to finance in the case, including falsifying accounting records, tax evasion, and siphoning money from shareholders. In response to the third question, the student states that the audit and accounting functions at Satyam could have stopped the fiasco if they had not artificially inflated financial statements and the company's share

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    27 views3 pages

    BE Khushboo Chouhan JLU05126

    Uploaded by

    Abhishek Bidhan
    This document contains a student's responses to questions regarding the Satyam Computer Services fraud case. In response to the first question, the student explains that while Mr. B Ramalinga Raju began the fraud, over time additional persons within the company's promoters and family were also involved in insider trading and acquiring land through fraudulent means. In response to the second question, the student outlines the major ethical issues relating to finance in the case, including falsifying accounting records, tax evasion, and siphoning money from shareholders. In response to the third question, the student states that the audit and accounting functions at Satyam could have stopped the fiasco if they had not artificially inflated financial statements and the company's share

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    SUBJECT: BUSINESS ETHICS

    JLUID: JLU05126
    COURSE CODE: MBAC20301
    ROLL NO: 2020MBA030
    INTERNAL 1

    Submitted by: Submitted to:


    Khushboo Chouhan Dr. Anuja Akhouri
    Que1: Is only Mr. B Ramalinga Raju responsible for Satyam’s fiasco?
    Ans: On January 7, 2009, Mr. B Ramalinga Raju admitted to his crime and cleared
    all top Satyam employees, stating that they had no idea what he was doing to
    orchestrate the intricate fraud of Rs. 7800 crores on Satyam's financial sheet.
    However, along with Mr. B Ramalinga Raju, the company's promoters were also
    involved in Insider Trading of the company's shares in order to acquire funds for
    the construction of a big land bank. Mr. B Ramalinga Raju began this fraud, but as
    time passed, additional persons were involved with him. Mr. B Ramalinga Raju
    gathered the finances to purchase the property on behalf of 330 corporations and
    around 30 individuals. They all possessed equity in these firms, 327 of which were
    related to the family.
    Que2: What are the major ethical issues relating to finance involved in this case?
    Ans: In this case, Ramalinga Raju, the chairman of Satyam, is a classic example of
    unethical business practices in the sector. He was purely motivated by a desire for
    money and territory. He aspired to compete with India's top three IT firms (Infosys,
    TCS and WIPRO). Raju picked the simplest, yet most immoral, methods to
    achieve his objectives. For nine years, he falsified the accounting records, evaded
    taxes, and syphoned money from shareholders by creating fictitious clients,
    account salaries, and invoices.
    Ramalinga Raju demonstrated his company's excellent financial health and drew
    funds from shareholders to purchase land. He had, ironically, won the Golden
    Peacock Global Award for Good Corporate Governance. In addition, Satyam was
    forbidden from doing business for eight years by the World Bank in December
    2008 for delivering "improper benefits" to Bank employees. As a result, the
    company's ethical standards were poor. Satyam's balance statement as of
    September 7, 2008 contained an accrued interest of Rs. 376 crores, which was non-
    existent, according to SFIO's findings. The company had given the impression that
    its fixed deposits were roughly Rs 3318.37 crore, when in fact it only had about Rs
    9.96 crores in FDRs. One of the most common sources of fraud at Satyam was the
    exaggeration of personnel numbers. While founder and chairman Raju stated that
    the company had 53,000 employees, the actual figure was slightly more than
    40,000. The phoney figure was only possible because payment to the remaining
    10,000 employees was forged year after year - an operation that clearly entailed the
    formation of sham organizations with a huge number of employees.
    Que3: Who & how could have stopped this fiasco?
    Ans: In this case, the audit and accounting functions of Satyam Computer Service
    can put a stop to this debacle. Both departments (audit and accounting) of Satyam
    were done in a deceptive and opaque manner in order to artificially enhance the
    company's share price. Both departments are aware that this has resulted in the
    collapse of investors. A week before B Ramalinga Raju's sensational confession,
    PwC, Satyam's auditors from 2000 to 2008, revealed that its audit report was
    incorrect because it was based on incorrect financial statements submitted by
    Satyam management. If the audit and accounting departments did not artificially
    inflate the -company's share price at the time. Then, maybe this fraud will never be
    happened.

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