Satyam, the name associated with the `7,136 crore accounting scandal that was perpetrated over several years by its former chairman B. Ramalinga Raju until his confession in January 2009, will now be relegated to textbooks on corporate governance. Photo: Mint (Mint)
Satyam, the name associated with the `7,136 crore accounting scandal that was perpetrated over several years by its former chairman B. Ramalinga Raju until his confession in January 2009, will now be relegated to textbooks on corporate governance. Photo: Mint
(Mint)

Satyam Computer stock ends flat on last day of trading

Wednesday brings to an end the saga of a company that was rescued from the brink of collapse by a new management

Hyderabad: After daily price fluctuations in the weeks leading up to its integration with its parent Tech Mahindra Ltd, the Satyam Computer Services Ltd stock was calm on its last day of trade, ending flat on BSE.

Wednesday was the last day of trade for the shares of Satyam Computer, bringing to an end the saga of a company that was rescued from the brink of collapse by a new management.

Vineet Nayyar, who became chairman after the firm was rebranded as Mahindra Satyam, and chief executive C.P. Gurnani played a pivotal role in reviving the fortunes of the ailing firm, wooing back some of its clients and top executives who had deserted the company after the 2009 crisis.

Satyam, the name associated with the 7,136 crore accounting scandal that was perpetrated over several years by its former chairman B. Ramalinga Raju until his confession in January 2009, will now be relegated to textbooks on corporate governance.

Satyam, named after Raju’s father B. Satyanarayana Raju, was founded in June 1987 “more as a hobby than anything else", Raju had once said. The commerce graduate with an MBA degree from Ohio University dabbled in the cotton spinning and construction businesses before he decided to set up an information technology (IT) company.

After an initial struggle, Satyam slowly expanded its clientele to become the fourth largest Indian software services company.

For many in Andhra Pradesh, Satyam was synonymous with IT until the scandal destroyed its exalted status. The Andhra Pradesh government, most notably former chief minister N. Chandrababu Naidu, took pride in presenting Satyam as one of the IT pioneers in the country in the league of Tata Consultancy Services Ltd, Infosys Ltd and Wipro Ltd.

Satyam expanded rapidly in the late 1990s and early 2000s, acquiring additional office space in Hyderabad, Bangalore, Chennai, Secunderabad, Pune, Chennai and Bhubaneswar, as well as in the US, Canada, Japan, Malaysia, China and Australia, among other places, as more companies outsourced their IT business to India.

Cognizant Technology Solutions Corp., one of the fastest growing IT firms, has its roots in a joint venture of Satyam and Dun and Bradstreet Inc.— Dun and Bradstreet Satyam Software (P) Ltd incorporated in January 1994.

Satyam produced several industry leaders, including C. Srinivasa Raju, co-founder and chairman of Peepul Capital, and Venkatesh Roddam, chief executive officer of Reliance MediaWorks Ltd. It also won several prestigious contracts, including one from FIFA to provide IT services for the 2010 and 2014 football World Cups.

The company also had its lows. Apart from the accounting scandal, it was accused by the World Bank of providing “improper benefits to bank staff" in return for contracts in 2008. Satyam denied the charge.

Satyam was listed on BSE in May 1992. Adjusted for a 5:1 split in July 2000 and a 1:1 bonus in October 2006, Satyam’s peak price was 723 on 7 March 2000, before falling to 11.50 in the days after Raju confessed to the accounting fraud. The shares ended Wednesday at 115.30 apiece.

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