Mahindra Satyam, previously known as Satyam Service Company Limited, is a thriving global business and information technology services company. It specializes in industry and functional expertise in technology and offers effective solutions to enhance clients' business processes and performances. Founded by B Rama Raju and Ramalinga Raju in 1987, the company's headquarters are located in Hyderabad, India.
Mahindra Satyam provides software development and consultancy services to large corporations worldwide including the US, Canada, Brazil, United Kingdom, China, Singapore, Malaysia. Fortune 500 companies such as General Electric, General Motors Nestle along with the US government are some of their notable clients across various industries like automotive products aviation farm equipment hospitality information technology real estate retail.
The company operates through three main sections: IT services Business Process Outsourcing (BPO), Software Products. The IT services section covers a broad range of
...offerings including software development system maintenance packaged software integration engineering design services. BPO section provides human resources finance accounting transaction processing related services. Lastly the Software Products section involves product development creation of software.
Mahindra Satyam operates with four subsidiaries in India, one of which is called Satyam Infoways and focuses on E-commerce and EDI. In 2009, The Economic Times reported that Satyam Infoways is the second-largest internet service provider and fourth-largest outsourcing house in India. Unfortunately, Mahindra Satyam's subsidiary, Satyam Computer Services, was involved in a fraud scandal. This had a significant impact on the Indian stock markets as it was discovered that they had been inflating their earnings and assets for years.
Despite being a major player in the industry, serving many Fortune 500 companies and employing over 50,000 individuals worldwide, Mahindra Satyam's president Ramalinga Raju admitted to
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reporting false accounts. He confessed to inflating the balance sheet by 50.4 billion rupees for the second quarter and exaggerating revenues by 76% and profits by 97%. Raju compared his actions to riding a tiger without knowing how to get off without being eaten by it. Instead of stopping the fraud when it was still small, he kept making it bigger every quarter.
Furthermore, Raju's attempt to expand through purchasing two buildings failed. Eventually, the falsified sum became too large to hide and Raju confessed about his fraudulent activities to stockholders and employees. As if these scandals were not enough, Mahindra Satyam also used spy software on certain computers which resulted in them being banned from World Bank contracts.The stock market in India faced negative consequences due to these scandals, resulting in a decrease in Indian stock prices. The Sensex index witnessed a decline, and specifically, Satyam's share plummeted by over 70%.
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