Corporate Governance Issues at Satyam Computers

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"This was one of those few companies in India that supposedly had been doing things the right way - that is, the Western way. It allegedly had all the checks and balances a U.S. company would want in an overseas business partner. Its financial statements received repeated clean bills of health from a respected outside auditor, PricewaterhouseCoopers. And still its corporate governance rotted away from the inside."¹

- Matt Kelly, Editor-in-Chief, Compliance Week², in January 2009.

"The idea of corporate governance has not sunk in as much as it should. Certainly we have dynamic, modern companies in which it has but in many family-owned businesses it has not. We need truly independent directors and auditors."³

- T K Bhaumik, Chief Economic Adviser, JK Organization⁴, in January 2009.

"Satyam board acted to the best of the knowledge they had and what they thought was the best for the company. So I don't think there was any violation of any corporate governance spirit or the law. The board acted in good faith."5 - M Rammohan Rao, Former Independent Director in Satyam Board, in December 2008. Introduction On January 08, 2009, M. Rammohan Rao (Rao), resigned as the Dean of the Indian School of Business (ISB)6.

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1] "Satyam: Sanskrit for 'Compliance Nightmare,'"www.complianceweek.com, January 11, 2009. ('Satyam' means 'Truth' in Sanskrit - a classical Indian language).
2] Compliance Week, published by Haymarket Media Inc. publishes on topics like corporate governance, risk and compliance etc.
3] Randeep Ramesh, "India has its 'Enron Moment' after Revelations of Satyam Founder's £1 bn Fraud,"www.guardian.co.uk, January 08, 2009.
4] JK Organization is one of the leading industrial groups in India. The group has interests in automotive, tyres & tubes, paper & pulp, cement, power transmission systems, oil seals, textiles, sugar, cosmetics and others.
5] "Corporate Governance was not Compromised Upon: Satyam,"www.moneycontrol.com, December 18, 2008.
6] ISB, located in Hyderabad, India was founded in 1999. Its partners include Wharton Business School, London Business School, and Kellogg School of Management. In the Financial Times' annual global business school rankings, ISB was listed at the 15th position in the year 2009.

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