Satyam
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The rise and fall
India Today, January 7, 2009
Satyam founder B. Ramalinga Raju shocked India by admitting massive fraud over several years. He was the Ernst and Young Entrepreneur of the Year in 2007 and the company won the Golden Peacock Global Award for Excellence in Corporate Governance given by the World Council for Corporate Governance.
Here is a brief history of the company, which was once a flag bearer of Cyberabad, as its headquarters and Andhra Pradesh capital Hyderabad were hailed in the early years of the IT boom in late 1990s.
Established : June 24, 1987
Global Headquarters : Hyderabad
Development Centres : Bangalore, Basingstoke, Beijing, Bhubaneswar, Budapest, California, Chennai, Chicago, Dalian, Georgia, Guangzhou, Gurgaon, Hartford, Hyderabad, Kuala Lumpur, Melbourne, Mumbai, Munich, Mississauga, New Jersey, Ontario, Pune, Sao Paulo, Shanghai, Singapore, Sydney, Tokyo, Wiesbaden
Employee strength : 52,865 (including employees in subsidiaries and joint ventures) as on September 30, 2008
1987: Raju founds Satyam with 20 employees .
1991: Debuts on Bombay Stock Exchage with an IPO oversubscribed 17 times
1992: Satyam goes public. IPO oversubscribed by 17 times, gets first offshore contract.
1999: Satyam Infoway (Sify) is the first Indian Internet company listed on NASDAQ. Satyam present in 30 countries.
2000: World Economic Forum identifies Satyam as one of the “100 leading pioneering technology companies”
2001: Satyam is listed on the New York Stock Exchange. Becomes world’s first ISO 9001:2000 certified IT company.
2003: Starts providing IT services to the World Bank
2005: Largest global development centre outside India (in Melbourne) begins operation; Citisoft and Knowledge Dynamics acquired
2006: Revenue exceeds $1 billion, sets up the first “Global Innovation Hub” in Singapore and operations in China
2007: World Bank probe finds former V-P Mohamed Muhsin had secured contracts worth $100 million for Satyam in return for company stock options (ADRs) at preferential prices
2008: Revenue crosses $2 billion. Satyam wins the Golden Peacock Award for Excellence in Corporate Governance.
Dec 16 ’08: Satyam announces plan to buy Maytas Infra and Maytas Properties, part-owned by the founders for $1.6 billion.Twelve hours later the deal is killed. Share price plunges 55 per cent.
Dec 17, ’08: Share prices fall by a third on concerns about corporate governance.
Dec 23, ’08: Barred from business with World Bank for eight years for providing Bank staff with “improper benefits”. Share prices fall another 14 per cent to the lowest in over four years.
Dec 26, ’08: The lone independent director since 1991, Mangalam Srinivasan, resigns
Dec 29, ’08: Three more directors quit Jan 2, ’09: Raju’s stake falls by a third to 5.13 per cent
Jan 5, ’09: Shares tumble 9 per cent on concern that corporate governance issues could hit new business
Jan 7, ’09: Raju admits to fraud, resigns as chairman. MD B. Rama Raju also quits. Satyam shares fall by 54 per cent at Rs 83.
Jan 8, ’09 : Raju arrested and sent to jail
