Consequences of Fraudulent Activities: Satyam Case Study
What were the consequences that befell the company upon the discovery of the fraudulent activities?
The Satyam case the discovery of the fraudulent activities gives big impact to the stakeholders. First of all, the Satyam business will be in difficulties and cannot focus on the core business. Satyam may be collapse like Enron Company.
Employees of Satyam spent anxious moments and sleepless nights as they faced non-payment of salaries, project cancellations, layoffs and equally bleak prospects of outside employment. "They were stranded in many ways - morally, financially, legally, and socially."Following the confession of the Chairman, many of them put up their resumes, seeking jobs in other companies. Apparently fearing that he may lose his job, a 23-year-old employee of Satyam, Vishwa Venkatesan, hailing from Salem, allegedly committed suicide in
Clients of Satyam expressed loss of trust and reviewed their contracts preferring to go with other competitors. Cisco, Telstra and World Bank cancelled contracts with Satyam."Customers were shocked and worried about the project continuity, confidentiality, and cost overrun." Satyam clients are likely to shift to other companies, . Clients complained about lack of attention, and many professional managers began to leave.
Shareholders lost their valuable investments and there was doubt about revival of India as a preferred investment destination. The VC and MD of Mahindra, in a statement, said that the development had "resulted in incalculable and unjustifiable damage to Brand India and Brand It in particular."The sharp fall in the price of Satyam shares also seriously affected. Satyam's shares fell to 11.50 rupees on 10 January 2009, their lowest level since March 1998, compared to a high of 544 rupees in 2008. As well as India's National Stock Exchange has announced that it will remove Satyam from its S&P CNX Nifty 50-share index on 12 January.
Investors may leave and do not want to invest in India, Many
The Satyam case the discovery of the fraudulent activities gives big impact to the stakeholders. First of all, the Satyam business will be in difficulties and cannot focus on the core business. Satyam may be collapse like Enron Company.
Employees of Satyam spent anxious moments and sleepless nights as they faced non-payment of salaries, project cancellations, layoffs and equally bleak prospects of outside employment. "They were stranded in many ways - morally, financially, legally, and socially."Following the confession of the Chairman, many of them put up their resumes, seeking jobs in other companies. Apparently fearing that he may lose his job, a 23-year-old employee of Satyam, Vishwa Venkatesan, hailing from Salem, allegedly committed suicide in
Clients of Satyam expressed loss of trust and reviewed their contracts preferring to go with other competitors. Cisco, Telstra and World Bank cancelled contracts with Satyam."Customers were shocked and worried about the project continuity, confidentiality, and cost overrun." Satyam clients are likely to shift to other companies, . Clients complained about lack of attention, and many professional managers began to leave.
Shareholders lost their valuable investments and there was doubt about revival of India as a preferred investment destination. The VC and MD of Mahindra, in a statement, said that the development had "resulted in incalculable and unjustifiable damage to Brand India and Brand It in particular."The sharp fall in the price of Satyam shares also seriously affected. Satyam's shares fell to 11.50 rupees on 10 January 2009, their lowest level since March 1998, compared to a high of 544 rupees in 2008. As well as India's National Stock Exchange has announced that it will remove Satyam from its S&P CNX Nifty 50-share index on 12 January.
Investors may leave and do not want to invest in India, Many