Satyam After Scam

yad agre canubandhe ca sukham mohanam atmanah nidralasya-pramadottham tat tamasam udahrtam

Translation And that happiness which is blind to self-realization, which is delusion from beginning to end and which arises from sleep, laziness and illusion is said to be of the nature of ignorance.

SATYAM The Hidden Truth

AGENDA • Satyam Scam • Satyam – The company • Scenario Analysis • Recommendations

SATYAM SITUATION • Failed Acquisition Attempt • The Bitter Truth • Government of India Intervenes • Effects of The Bitter Truth

FAILED ACQUISITION ATTEMPT

THE BITTER TRUTH (Accounting Fraud)

•

GOVERNMENT OF INDIA Ministry OfINTERVENES Corporate Affairs

• Arrest Of Satyam’s Top Management • Legal Action • Interrogation • ICAI Actions Against -

EFFECTS OF THE BITTER TRUTH • Loss in Reputation • Financial / Operational • Satyam Stock • Employee Morale

SATYAM IRD’S EYE VIEW ssociates:- 53000 employees. Revenue:- Rs. In Crores. eographies:- 63 countries.

BIRD’S EYE VIEW 

Client Base:- 690 Clients all over the world.

 Line

of Business – Software solution, BPO & IT.

 Listed

on:- NYSE, US and Euro next, Amsterdam, Europe in addition to BSE and NSE in India.

OFFERINGS List of services: Application Services

List of industries served: Automotive

 Business Value Enhancement

 Financial Services

 Consulting and Enterprise Solutions

 Government and Healthcare

 SAP Solutions

 Infrastructure

 Six Sigma Consulting

 Media and Entertainment

 Supply Chain Management & many more.

 Retail & Supply Chain Management & many more.

COMPANY COMPOSITION Business process consulting

IT strategy consulting

Quality consulting CONSULTING

ERP

Supply Chain

CRM

Engineering & Embedded solutions Application Mgmt Custom built

Package d

Infrastructu re services

PLM BI

ebusiness EAI

Business Process Outsourcing

SYSTEM INTEGRATION

OUTSOURCING

CLIENTAL BASE

V e r t i c a l s D o m a i n s

JAVA,

Horizontal - Software .NET, SAP, SOA, SAAS etc

OUR ACHIVEMENTS  1995 – First ISO 9001:2000.  1999 - Listed on NASDAQ.  2001 - Satyam listed on New York Stock Exchange.  2002 - Satyam wins Golden Peacock Award for Excellence in Corporate Governance.  2002 –Wins CNBC's Asian Business Leader.

OUR ACHIVEMENTS 

2003 - Satyam Computer honored with prestigious IBM Lotus Award.



2005 - Satyam acquired Knowledge Dynamics. Launched EMRI.



2006 - Achieved global certification - ISO 9001, ISO 20000,ISO 27001.



2007 - Becomes the Official IT Services Provider for the FIFA World Cups, 2010 (South Africa) and 2014 (Brazil).

SCENERIO ANALYSIS • Satyam Goes Bankrupt • Satyam Continues to Exist as an Entity • Satyam Gets Acquired (Single Entity) • Satyam Gets Acquired (Multiple Entities)

asakta-buddhih sarvatra jitatma vigata-sprhah naiskarmya-siddhim paramam sannyasenadhigacchati Translation One can obtain the results of renunciation simply by self-control and by becoming unattached to material things and disregarding material enjoyments. That is the highest perfetional stage of renunciation.

RECOMMENDATIONS 1. Interested Companies for Acquisition:–L & T

(share%)

– Spice Group () – Hinduja Group () – Essar (Aegis BPO) () – iGATE ()

RISKS –

1. Satyam continues to exist as an entity

• Loss of Goodwill • Change Management • Ability to Scale-up

RISK –

2. Satyam gets acquired (Single

entity)

• • • •

Loss Of Negotiating Leverage Impact Relationship Potential Increase In Cost Scalability

RISK – 3. Satyam gets acquired (multiple entities)

• • • •

Service Delivery And Quality Loss Of Senior Management Potential Increase In Cost Increased Challenges

RISK – 4. Satyam goes bankrupt • • • •

Unable To Manage Operations Employees’ Salaries Impact On Buyer’s Business Additional Cost for Alternate Provider (clients)

ESTIMATED PRICE FOR ACQUSITION • Price Band Of 65 – 80 Per Share • Net Current Assets/No Of Shares • Bagged 15 contracts • Other Bidders Willing To Pay What Price

OUR RECOMMENDATION –

L&T Reasons –

L&T ACQUIRE SATYAM •De-merger L&T Infotech from the parent Company •L&T Infotech as a different entity •Top management of L&T Infotech would handle the working of the company

2. To gain investors trust - Bank on L&T brand name and management - Credit Rating of the Company - Future expansion plans

3. To gain clients trust • Meeting the deadlines • Additional Services 4. To boost employee morale • Pay salaries on time • HR should play key role

5. Government Measures • • • •

Sell of Raju’s personal assets Stringent laws Action against PWC Focus on Corporate Governance To save Indian IT Image

FUTURE Many more events yet to unfold …………

Hope for the best

sreyan sva-dharmo vigunah para-dharmat sv-usthitat svabhava-niyatam karma kurvan napnoti kilbisam

Translation It is better to engage in one's own occupation, even though one may perform it imperfectly, than to accept another's occupation and perform it perfectly. Prescribed duties according to one's nature, are never affected by sinful reactions.

Special Thanks to – Abhay Desai Deena Paul Vanessa (from Satyam) Navin (from Satyam) Nupur Khanna Salil Lavankar Castrol Team Tata Tea Team