History[ edit ] Initial confession and charges[ edit ] On 7 January , the chairman of Satyam, Byrraju Ramalinga Raju , resigned, confessing that he had manipulated the accounts of Rs 14, crore in several forms. The global corporate community was said to be shocked and scandalised. SEBI also ordered disgorgement of over Rs 13 crore wrongful gains from the firm and 2 partners. PwC announced their intent to get a stay order.
|Published (Last):||23 February 2010|
|PDF File Size:||15.84 Mb|
|ePub File Size:||1.96 Mb|
|Price:||Free* [*Free Regsitration Required]|
Role of Independent Directors in Satyam Scam Background Satyam is the company established in , the company was the fastest growing information technology company in India ranked as 4th. There were 53, employees working for the company, Satyam had a 9 per cent market share and its revenue earned was around 2. Satyam is the first company of India that was listed in the top three international exchanges of the world i.
Fortune companies have served by Satyam which are out of total international companies. In the balance sheet of the company, there was a scam of Board, accounting standards, government invention, investors, and ethics and code of conduct, everything in Satyam became questionable. It was the duty of the board to monitor the ethical policies of the company and the way how the company is maintaining those ethical policies.
The board was accountable for the information regarding finance that was being projected. Role of The Independent Directors There are no any specific provisions in the Indian Law regarding the role of the independent director.
The independent director must act and perform honestly with the skill and diligence degree is one of the basic provisions. Broad obligations of the independent director involve: promote the company success; exercise the reasonable skill, diligence, and care; avoid the conflicts of interest, and declare interests in arrangements and proposed transactions with the company.
Role of Independent Directors In Satyam The role of the independent directors has put in the spotlight after the Satyam scandal. Lack of commitment was shown by the independent directors in Satyam. Independent directors, as well as corporate governance, was failed to perform efficiently and effectively.
It was suggested in the report by Higgs that directors who are non-executives should debate constructively, question intelligently, challenges rigorously, and then ultimately decide dispassionately.
These qualifications and quantities, unfortunately, are not specified in the Indian Companies Act regarding independent director. Board of Satyam was blamed by the shareholders and media for agreeing to a Maytas transaction. Such incidents can be avoided by specifying the roles and obligations of the independent board.
Satyam scam: All you need to know about India's biggest accounting fraud
Satyam Scam Case Study Analysis