Business Case Studies,Corporate Governance & Business Ethics Case Study, Flour Corp's Business Ethics Practices: Creating Six Sigma Standards in Staying Corruption-Free

Code : GOV0036

Year : 2009

Industry : Business Law, Governance and Ethics

Region : India

Teaching Note:Available

Structured Assignment :Available

Introduction: On January 7th 2009, Wednesday, the turn of events at one of the internationally reputed software firms shocked the global corporate world. The founder and CEO of Satyam Computer Services Ltd. (Satyam) B. Ramalinga Raju (Ramalinga Raju) submitted his resignation letter to the board of directors (board). It was not the news that shocked the world, however, rather astonishing were the confessions .

Ramalinga Raju revealed that out of Satyam’s cash and bank balances of INR 53.61 billion mentioned in the financial statements as on September 30th 2008, INR 50.4 billion were inflated.1 Ramalinga Raju exposed all his experiments with truth leading to an accounting fraud that was going on over the years.

It was astonishing for all stakeholders – the investors, clients and employees as well as the government and regulatory bodies – to listen to Satyam’s truth revealed by its own founder, who had nurtured the growth of his brainchild from a small Information Technology (IT) firm to the fourth-largest IT services provider in India, which spread across more than 60 countries with nearly 53,000 employees serving over 185 Fortune 500 clients. More ironical was the fact that Satyam won accolades for excellence in corporate governance practices.