A CASE STUDY OF SATYAM SCAM AND CORPORATE GOVERNANCE ISSUES

AUTHOR – ANISHA MISHRA* & DR. RESHMA UMAIR**

* STUDENT AT AMITY LAW SCHOOL, LUCKNOW

** ASSISTANT PROFESSOR AT AMITY LAW SCHOOL, LUCKNOW

BEST CITATION -ANISHA MISHRA* & DR. RESHMA UMAIR, A STUDY ON ECONOMICS OF CORPORATE GOVERNANCE AND REGULATION, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (6) OF 2025, PG. 738-745, APIS – 3920 – 0001 & ISSN – 2583-2344

ABSTRACT

Satyam Computers were once the crown jewel of Indian IT industry, but were brought to the ground by its founders in 2009 as a result of financial crime. The debacle of Satyam raised a debate about the role of CEO in driving a company to the heights of success and its relation with the board members and core committees. The scam brought to the light the role of corporate governance (CG) in shaping the protocols related to the working of audit committees and duties of board members. The Satyam scam was a jolt to the market, especially to Satyam stockholders. An attempt is made in this project to examine in-depth and analyze India‘s Enron, Satyam Computer’s creative-accounting scandal. In public companies, this type of creative accounting leading to fraud and investigations are launched by the various governmental oversight agencies. The accounting fraud committed by the founders of Satyam in 2009 is a testament to the fact that the science of conduct is swayed in large by human greed, ambition, and hunger for power, money, fame and glory. Scandals have proved that there is an urgent need for good conduct based on strong corporate governance, ethics and accounting & auditing standards. The Satyam scandal highlights the importance of securities laws and CG in emerging markets. Indeed, Satyam fraud spurred the government of India to tighten the CG norms to prevent recurrence of similar frauds in future. Thus, major financial reporting frauds need to be studied for lessons-learned and strategies-to-follow to reduce the incidents of such frauds in the future. The increasing rate of white-collar crimes demands stiff penalties, exemplary punishments, and effective enforcement of law with the right spirit.