The Satyam scandal has shaken the confidence of the owners and the stakeholders of the company across the globe. The investors even suspected the due diligence exercised by all the responsible entities associated with this company. Hence there is an immediate need to revise the corporate governance practices in India.

The series of events that have been taking place at Satyam since the second half of December 2008, have become learning points to various parties related with Satyam either directly or indirectly across the globe. Further, this saga has compelled various responsible entities to be answerable for their negligence in exercising due diligence while fulfilling their respective roles. Eventually and most importantly, the scandal has questioned the very basis of accounting and corporate governance practices followed by the Indian corporates.

It all started on December 16, 2008 when the top officials of Satyam Computers came out with the announcement that the Board had given its approval for the acquisition of 51% stake in Maytas Infra (for $0.3 bn) and buyout of the entire stake in Maytas Properties (for $1.3 bn) which were then controlled by the sons of Ramalinga Raju, the founder of Satyam Computer Services. The reaction of the investing community by dragging down the share price from Rs. 226.5 to Rs. 158.05 immediately after the announcement of this unrelated diversification indicated that the investors could sense something happening at the company which was against their interests.

Portfolio Organizer Magazine, The Satyam Fiasco, Corporate Governance, Satyam Computers, Ramalinga Raju, Maytas Infra, Securities and Exchange Board of India, Sebi, business operations, Indian IT industry, Sarbanes-Oxley Act, Accounting Standards of Companies Act, Regulatory Authorities, Financial Resources, US Market.