Story Behind Satyam Scam :
Story Behind Satyam Scam Satyam episode - individual greed, celebration of profit making, belief in the markets and regulatory failure.
Founder promoter of Satyam,Mr. Ramalinga Raju, resigned as the company’s Chairman on January 7th 2009.
He stated that roughly 1.5 Billion US $ firm’s fund are non-existing.
Shown a profit of 25% instead of actual profit of 3%.
He tried to fill the gap of 1.5 Billion US $ .
Who is responsible? :
Who is responsible? Independent Director
Auditor
Security and Exchange Board of India (SEBI).
Role of Independent Directors :
Role of Independent Directors Independent Directors - director’s remuneration and no other relation.
Maytas Deal was having six independent directors.
Any of the independent directors should be a member of audit committee.
Due to this scam they are still independent.
Duties of An Auditor :
Duties of An Auditor Must be Chartered Accountant.
He should be fair.
Requires some statutory duties.
A case of fault of auditors as on Satyam scam.
SEBI as a regulatory :
SEBI as a regulatory Bridge between investors and stock exchange.
Information regarding listed companies.
Power to issue directions and investigate.
Fault of SEBI as on Satyam Case.
Conclusion :
Conclusion The Satyam Scam can be avoided :
If auditor firm is honest.
If SEBI plays an active role.
Review legal compliance report periodically by independent directors.
Slide 9:
Thank You