ABSTRACT

Satyam Computer Services was founded by Ramalinga Raju in 1987, and quickly became one of the four largest information technology (IT) service providers in India. At its peak, Satyam had over 650 global companies as clients, 185 of which were Fortune 500 corporations that delivered revenue of over $2.1 billion with an operating profit of $413.8 million. Satyam represented the bright future of Indian IT service businesses globally, before it came crashing down in a mess of fraudulent financial reporting. The Satyam saga unfolded because of weak or nonexistent corporate governance mechanisms in place in the company. Satyam shares collapsed by 80 per cent on the Mumbai Stock Exchange, and the New York Stock Exchange suspended trading in Satyam shares; the company lost its leadership as senior executives were arrested. With the encouragement of the Indian government, Mahendra Tech took a majority stake in Satyam which became Mahendra Satyam to become the third largest IT services provider in India.