Satyam Computers

Insider trading

group members

Raghav Grover

Tony JK

Srinidhi Chari

Aditi Verma

Simran Ahuja

Ritika Chauhan

Vishnu Warriar

Shubham Bose

Vikas

What is insider trading?

It is defined as the malpractice wherein trade of a company securities is undertaken by people who by virtue of their work have access to the otherwise non public information which can be crucial for making investment decisions.

So what is the whole fuss about?

Raju was arrested Andhra Pradesh police on charges of Conspiracy, Breach of Trust, Cheating and falsification of Records.
He used dummy accounts to trade in Satyam's shares, thus violating Insider Trading Norms.

Raju also reported 53,000 employees instead of 40,000 and transferred the surplus funds to Maytas, a company started by him.

The amount was around 20,000 crores p.m. to Maytyas.

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a BRIEF history

Satyam Computer Services, founded in 1987 was one of India's most reputed organisations.
It converted into a Public Joint Stock Company in 1992.
It was a part of the NIFTY-50 Share Index.
Ramalinga Raju had grown to be regarded as on of the most influential businessmen.

Understanding the scam

The balance sheet of September 2008 showed an inflated (non-existent) Cash and Bank balance of Rs. 5040 crore.
An accrued interest of Rs. 376 Crore which was also non-existent.
An understated liability of Rs. 1230 crore on account of funds arranged by Raju.

Effect of the scandal

The scandal shocked and effected the whole financial and stock market.

Satyam recorded the highest single day share-price fall in history, a 77% fall.
This mean the share price which was around Rs. 544 in mid-2008 went to Rs. 11.50 on 6 January, 2009.
This also resulted in SENSEX dropping about 7.3% and NIFTY dropping 6.2%

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