1.LATAR BELAKANG Satyam Computer Services Ltd., merupakan sebuah perusahaan outsourcing India ternama yang melayani lebih dari sepertiga perusahaanperusahaan dalam Fortune 500. Satyam menduduki peringkat keempat sesudah Infosys, TCS dan Wipro, dengan pangsa pasar mencapai 9% dan memiliki pegawai sebanyak 53.000. Jasa yang ditawarkan Satyam Computer Services adalah berupa layanan teknologi informasi berupa pengembangan perangkat lunak, pengelolaan layanan teknologi informasi, desain, pengembangan data warehouse atau website dan memberikan system integrasi dalam tegnologi informasi di suatu perusahaan.Satyam melayani pasar seperti manufaktur, ritel, jasa keuangan, transportasi dan telekomunikasi. Gambar 1.1 Bidang Jasa yang Ditawarkan Satyam Computer Service Satyam Computer Services juga melakukan ekspansi dengan menjangkau 66 negara. Dalam laporan keuangannya dimana sebesar 75,9 % dari total sales revenue didapatkan dari jasa yang dilakukan oleh Satyam Group yang berada di Negara-negara lain. Referensi yang dijadikan acuan dalam kasus Satyam Computer Services adalah dokumen U.S SEC tanggal 5 April 2011, dan dapat diunduh dari situs WEB SEC. Dokumen ini berisi hasil investigasi SEC mengenai : a. Kesalahan dan sanksi terhadap pimpinan Satyam Computer Services Ltd.; b. Kesalahan dan sanksi terhadap auditor Satyam, PwC India dan partnernya. 2. Skema Satyam dalam Melakukan Fraud Gambar 2.1 Skema Skandal Satyam 2.1 It was Like Riding a Tiger,…. Ramalinga Raju meletakkan jabatannya sebagai Chairman sesudah membuat pengakuan bahwa : • Saldo bank sebesar 50,4 miliar rupees, atau setara dengan $1,04 miliar sebenarnya fiktif (nonexistent). Angka ini dilaporkan sebagai bagian dari saldo sebesar 53,6 miliar rupees dalam kuartal kedua yang berakhir 30 September. • Pendapatan untuk kuartal tersebut sebenarnya 20% lebih rendah dari 27 miliar rupees yang dilaporkan. Sedangkan operating margin hanyalah bagian yang sangat kecil dari jumlah yang dilaporkan. • Raju melaporkan bahwa Satyam mempunyai 53.000 karyawan dengan operasi di 66 negara dan alasan awal Satyam melakukan manipulasi itu diakui karena keinginan untuk melakukan ekspansi di sejumlah Negara dan untuk mengelabui pihak pasar modal agar dapat persetujuan untuk melakukan ekspansi. Berikut ini terjemahan sebagian dari isi surat pengakuan B. Ramalinga Raju, Chairman, Satyam Computer Services Ltd. Tanggal 7 Januari 2009. Yang terhormat Anggota Dewan Pimpinan, Dengan perasaan menyesal yang mendalam, dan dengan beban yang teramat berat yang saya tanggung, saya menyampaikan fakta-fakta berikut kehadapan anda : Neraca pada tanggal 30 September 2008 menunjukkan : • Saldo kas dan bank (cash and bank) fiktif sebesar Rs 50,40 miliar ($1,04 miliar), dibandingkan dengan Rs 53,61 miliar yang ditunjukkan dalam pembukuan. • Piutang bunga (accured interest) fiktif sebesar Rs 3,76 miliar. • Utang yang dinyatakan kerendahan (understated liability) sebesar Rs 12,3 miliar untuk dana-dana yang saya atur. • Piutang yang dinyatakan terlalu tinggi (overstated debtors position) sebesar Rs 4,90 miliar (dibandingkan dengan Rs 26,51 miliar yang ditunjukkan dalam pembukuan). Untuk kuartal September (Q2) kami melaporkan pendapatan (revenue) sebesar RS 27 miliar dan margin usaha (operating margin) sebesar Rs6,49 miliar (24% dari pendapatan); pendapatan seharusnya (actual revenues) Rs21,12 milliar dan margin usaha (operating margin) seharusnya Rs610 juta (3% dari pendapatan). Ini mengakibatkan saldo cash and bank fiktif meningkat sebesar Rs5,88 miliar dalam Q2 saja. Tanda terbesar terlihat dalam neraca yang disebabkan semata-mata oleh laba palsu (infated profits) selama beberapa tahun terakhir.Laba palsu ini hanya dilaporkan oleh Satyam, sedangkan anak-anak perusahaan menunjukkan kinerja sebenarnya. Yang semula merupakan kesenjangan kecil (marginal gap) antara laba usaha sebenarnya (actual operating profit) dan angka pembukuan, berlangsung selama beberapa tahun. Sampai mencapai jumlah yang tidak terkendali lagi, ketika perusahaan tumbuh secara signifikan (pendapatan tahun mencapai Rs112,76 miliar dalam kuartal September 2008, dan laba ditahan sebesar Rs83,92 miliar). Perbedaan antara laba sebenarnya dan laba yang ada dalam pembukuan menjadi lebih menonjol lagi karena perusahaan harus “menambah” resources (sumber daya) dan aset untuk mendukung tingkat usaha yang lebih tinggi lagi dan ini tercermin dalam kenaikan biata dan beban secara signifikan. Setiap upaya menutup kesenjangan ini, selalu berujung kegagalan. Karena para promotor memegang sejumlah saham (equity), timbul kekhawatiran bahwa kinerja yang buruk akan berdampak dengan pengalihan saham atau kepemilikan (takeover), yang selanjutnya akan mengungkapkan kesenjangan ini. secara disengaja diabaikan oleh ketua tim audit. 2. ! Sengaja diabaikannya faktur-faktur palsu yang terdapat dalam transaksi-transaksi yang dijalankan Satyam. 7 Januari 2009. oleh Reuters disajikan dalam system angka Barat (Western system). Sumber : Reuters. ! Tidak pernah melaporkan hasil pekerjaan auditnya kepada komite audit.2 Who is Responsible for Satyam Scandal? What is The function of External Auditor and Internal Auditor in Satyam Computer Services? Dalam perjalanan memanipulasi laporan keuangan Satyam. ! Di dalam perencanaan auditnya lebih memprioritaskan atas dasar-dasar permintaan chairman. (Seperti menunggang harimau. maka terlihat sangat jelas beberapa manipulasi dalam hal tidak di periksa dengan benar atas invoice yang ada di dalam Satyam. namun juga di dukung oleh kinerja internal auditor Satyam yang tidak melakukan pekerjaannya dengan benar. ! Sejumlah bukti-bukti temuan serius yang ditemukan oleh tim audit. ternyata bukan hanya terkait dari pihak chairman yang sengaja berniat untuk melakukan manipulasi keuangan. Dengan tidak bekerjanya fungsi auditor internal di dalam pengendalian internal Satyam tersebut. . Angka-angka dalam crores dan lakh (Indian numerical system). not knowing how to get off without being eaten. Oleh karena itu tercermin atas laporan keuangan Satyam kuartal 1 tahun 2004 hingga kuartal 2 tahun 2009. ! Tidak pernah memverifikasi atau memeriksa dengan benar cash and bank balance. Berikut ini adalah beberapa hal yang dilakukan oleh internal auditor Satyam dalam menjalankan pekerjaannya : ! Auditor internal tidak melakukan pengujian. meneliti atas verifikasi setiap transaksinya mulai dari awal mulai terjadinya transaksi di setiap tahun hingga berakhirnya tahun pelaporan. tak tahu harus kapan turun tanpa dimangsa si macan itu).It was like riding a tiger. Published Revenue of Financial Statement Satyam Setelah kinerja auditor internal yang buruk. dan kalimat yang sering diserukan oleh komunitas pasar modal Wall Streetyaitu :Where were the auditors? Where were the watchdogs? Why didn’t .Gambar 2. Hal tersebut terungkap ketika tersiar berita tentang fraud yang massif dan sistematis seperti yang dialami Enron.2. Gopalakrishnan dan Srinivas Talluri) bersekongkol dengan Satyam. ternyata diperburuk dengan keadaan bahwa adanya indikasi bahwa dua auditor eksternal yang saat itu di tunjuk dari PricewaterhouseCoopers’ (yang bernama S. U. sebuahperusahaan raksasa di bidang penelitian IT mengkapkan secara terinci persekongkolan antara PricewaterhouseCoopers dan Satyam Computer Service. Laporan Gartner mengutip pejabat PwC yang menyatakan Satyam melaksanakan system integration business untuk Idearc-sekalipun pada waktu itu ada kesepakatan tidak bersaing selama lima tahun (a five-year non-compete clause) dengan IBM sesudah 2002. maka perlu juga melihat dari berita yang diangkat oleh Financial Chronicle mengenai benturan kepentingan antara Satyam dan PwC berdasarkan Laporan Gartner.the watchdog bark?. PwC had business links”.Kaliamat pernyataan ini sering diikuti dengan adanya spekkulasi mengenai hubungan istimewa antara auditor dan kliennya. yang bekerja di salah satu Big-4 mengatakan kepada Financial Chronicle :“Ingat. Dalam standar audit.”Satyam.5 miliar. Satyam dan auditornya tidak diperkenankan menjadi strategic partner”. (http://wrd. Beberapa isu yang menjadi sorotan berbagai pakar. Dalam kancah fraud Satyam.com/companiessatyam-pwc-had-business-links- report-252 ). Gambar 2. Seorang auditor India. Pada tahun itu PwC menjual bagian besar praktik konsultingnya kepada IBM seharga $3. sekalipun pada saatyang bersamaan entitas PwC di India mengaudit Satyam. Financial Chronicle.mydigitalfc. Laporan Gartner mengindikasikan bahwa PwC mempunyai kemitraan strategis (strategic partnership) dengan Satyam sampai akhir tahun lalu. Yang menjadi sorotan awalnya adalah masalah fee untuk audit yang dilakukan PwC dan potensi benturan kepentingan sehubungan dengan kerja sama Satyam-PwC dalam proyek IT. 26 Mei 2009. . Kuesioner yang dikirimkan Financial Chronicle tidak memperoleh tanggapan dari PwC.3 Tabel perbandingan audit fee Setelah melihat perbandingan audit fee tersebut.S Securities and Exchange Commission melarang kemitraan semacam itu. mengenai hubungan Satyam dan auditornya. Berikut ini adalah terjemahan bebas atas berita yang bersumber :Ritwik Mukherjee. Satyam terdaftar di SEC. Bahkan standar audit di india tidak membenarkan kemitraan semacam itu antarastatutory auditors dengan klien auditnya. . Berdasarkan laporan Gartner. Seorang komentator akuntansi di situs itu bertanya: “Yang aneh mengenai hal ini ialah mengapa tidak terbesit di pikiran anggota DPR di India dan Amerika bahwa benturan kepentinga (conflicts of interest) yang begitu terang benderang telah terjadi. Laporan Gartner. Advisory Strategy Leader PwC. ketika non-compete agreement berakhir.S. mengatakan kepada Financial Chronicle :”Laporan Gartner merupakan indikasi yang terang bernderang bahwa Satyam merupakan strategic partner PwC secara global yang memungkinkan mereka “menyiasati” pembatasan non-compete clause dengan IBm dan pemecahan terhadap masalah lemahnya keahlian (lack of technical expertise) mereka di bidang IT. dengan penghematan jutaan dolar. Mckenna mempertanyakan PwC : ”Apakah pimpinan PwC-di Amerika. yaitu : ! Auditor eksternal tidak pernah melakukan konfirmasi kepada bank yang terkait terhadap saldo bank yang tercantum dalam Satyam. namun tetap saja PwC memeriksa Satyam sebagai kliennya. ! Auditor eksternal melanggar beberapa peraturan audit yaitu seperti adanya hubungan istimewa antara PwC dengan Satyam. kata McKenna. ! Tidak pernah memeriksa baik itu secara keseluruhan ataupun secara sampel terhadap sejumlah invoice yang terdapat di transaksi Satyam.Sejak 1Oktober 2007. dipublikasikan dalam bulan Juli 2008 dengan judul “PwC to World:’We Implement”. PwC terlibat dalam seluruh siklus dari proyek itu (full project life cycle).uk. memungkinkan PwC “melalui kecerobohan (negligence) atau cara lain yang lebih buruk.Francine Mckenna. situs ternama. dan di India-memungkinkan dan barangkali mendorong persekongkolan dalam fraud yang bernama ‘India’s Enron’ untuk consulting business strategy mereka? Accountancyweb. secara global.co. ada spekulasi mengenai apakah PwC mungkin kembali ke bisnis implementasi IT. Selain itu juga ada beberapa hal yang dilakukan oleh auditor eksternal dari PwC yang memeriksa Satyam. Joe Duffy. dan mungkin juga dalam proyek lain.PwC juga membantu Iderc bergeser ke strategi IT yang sangat tergantung pada outsourching. the humungous fraud that is Satyam. Laporan selanjutnya mengutip U. seorang blogger dan mantan staf Big-4. Hubungan ini.” Laporan Gartner mengomentari bahwa sebagian besar penugasan ini dilakukan ketika PwC masih terkat non-compete agreement dengan IBM dan Satyam Computer Services melaksanakan sebagian besar dari system integration work. Francine Mckenna mengatakan bahwa hubungan antara keduanya (PwC dan Satyam) adalah untuk jasa IT di Idearc. yang mengatakan pada PwC’s Analyst Day:” Dengan Idearc (spin-off dari Verizon senilai $3 miliar). juga mengutip laporan Gartner. 1 Pressure Pressure adalah dorongan yang menyebabkan seseorang melakukan fraud. ketergantungan narkoba. contohnya hutang atau tagihan yang menumpuk. ! Liabilitas atas pajak tidak pernah dilaporkan dalam hasil laporan auditnya. 2. dan lain-lain.! Menerima bayaran audit fee yang jauh diatas bayaran para pesaing Satyam dalam melakukan audit. ! Tidak pernah memeriksa atau memverifikasi atas tingkat bunga palsu. Pada umumnya yang mendorong terjadinya fraud adalah kebutuhan atau masalah finansial. namun auditor eksternal tidak pernah melakukan tindakan untuk melaporkan temuannya itu. Manajemen atau .3 Analisa fraud triangle pressure opportunity rationalization 2. gaya hidup mewah.3. ! Meskipun ditemukan adanya system pengendalian internal di Satyam yang lemah. Tapi banyak juga yang hanya terdorong oleh keserakahan. ! Tidak pernah melakukan dengan benar melakukan pemeriksaan dari awal perikatan audit hingga akhir perikatan audit. dan lain-lain. 2. kebiasaan buruk seseorang seperti berjudi dan peminum. penghargaan. . CEO berasa “lapar yang tidak terpuaskan seperti halnya dengan mengambil kesempatan berupa bonus. Salah satu yang menjadi contoh ialah penggelapan uang perusahaan bermula dari suatu tekanan (pressure) yang menghimpitnya. Untuk melakukan kecurangan lebih banyak tergantung pada kondisi individu. Orang ini memiliki kebutuhan keuangan yang mendesak. yang tidak dapat diceritakannya ke orang lain. CFO yang lemah tidak berdaya di bawah CEO yang melakukan tindakan kecurangan atau fraud tersebut. atau mempunyai harapan/tujuan yang tidak realistik.3. kekuasaan.2 Opportunity Opportunity adalah peluang yang memungkinkan fraud terjadi. Setidak-tidaknya. padahal ia tidak bisa berbagi (sharing) dengan orang lain. Pada kasus satyam ini gejala fraud yang terjadi ini dikarenakan adanya tekanan yang dirasakan oleh pihak CEO. itulah yang dirasakannya. Biasanya disebabkan karena internal control suatu organisasi yang lemah. Konsep yang penting di sini adalah tekanan yang menghimpit hidupnya (berupa kebutuhan akan uang) yang menjadi tambahan untuk hidupnya.karyawan mungkin memiliki dorongan atau tekanan yang menjadi alasan melakukan kecurangan. seperti sedang menghadapi masalah keuangan. kurangnya pengawasan. meneliti atas verifikasi setiap transaksinya mulai dari awal mulai terjadinya transaksi di setiap tahun hingga berakhirnya tahun pelaporan dan auditor tidak pernah memverifikasi atau memeriksa dengan benar cash and bank balance. Namun. ada yang mempunyai kesempatan besar dan ada yang kecil. Kesempatan untuk melakukan kecurangan selalu ada pada setiap kedudukan. dan control dan upaya deteksi dini terhadap fraud. 2. Secara umum manajemen suatu organisasi/perusahaan mempunyai kesempatan yang lebih besar untuk melakukan kecurangan dari pada karyawan. dan/atau penyalahgunaan wewenang. Keadaan lingkungan yang ada di tempat kerja memberikan kesempatan untuk melakukan kecurangan. sebagai contoh bahwa Auditor internal tidak melakukan pengujian. Jadi dengan ini CEO memanfaat kan kesempatan atas support dari pihak auditor internal dalam melakukan fraud.4. Untuk melakukan kecurangan tergantung pada kedudukan pelaku terhadap objek kecurangan. Kesempatan yang dilakukan oleh CEO dan para pelaku fraud di perusahaan satyam ini adalah mereka semua sudah bekerja sama untuk menutupi hal kecurangan trersebut. Di antara 3 elemen fraud triangle.3 Rationalization . opportunity merupakan elemen yang paling memungkinkan untuk diminimalisir melalui penerapan proses. prosedur. Dalam kasus Satyam ini bahwasanya tindakan yang dilakukan untuk membahagiakan keluarga dan orang orang yang dicintainya karena ini atas keserakahan yang dilakukan CEO. mencari pembenaran sebenarnya merupakan bagian yang harus ada di kejahatan itu sendiri. 3) Board’s failure to exercise judgment. Yang penting lagi trindakan nya ini mendapat dukungan bahwa auditor intrnal melakukan tindakan kecurangan dan CEO juga beranggapan tindakan ini tidak berbahaya. promosi. 2) A weak chief financial officer. bahkan merupakan bagian dari motivasi untuk melakukan kejahatan.Rasionalisasi menjadi elemen penting dalam terjadinya fraud. Sonia Jaspal yang menulis tentang 15 fraud symptoms. Selain itu masa kerja CEO ini biasanya cukup lama dan dia merasa seharusnya berhak mendapatkan lebih dari yang telah dia dapatkan sekarang seperti posisi. 4) Growth strategies based on given financial numbers. dan lain-lain. dimana pelaku mencari pembenaran atas tindakannya. cocok untuk perusahaan India pada umumnya dan Satyam khususnya. gaji. . Seorang diantaranya.Gejala-gejala ini umumnya seperti red flags. Lima belas (15) Fraud Symptoms ini adalah : 1) Insatiable hunger of chief executive officer. Rationalization diperlukan agar si pelaku dapat mencerna perilakunya yang illegal untuk tetap mempertahankan jati dirinya sebagai orang yang di percaya. 2 Behavioral Red Flags Banyak akademisi dan pengamat di India mengomentari skandal Satyam. 8) Kebobolan dalam pengendalian internal. 14) Manipulasi pasar modal dengan”goreng-menggoreng” informasi untuk menaikkan harga saham. 9) Ineffective internal audit function. 11) Fungsi manajemen risiko kecurangan yang menyimpang. 6) Kawasan distribusi yang begitu luas sehingga tidak tertangani. penghargaan. 9) Fungsi audit internal yang tidak efektif. 7) Fungsi SDM yang tidak efektif. 15) Masyarakat yang sarat korupsi. 3) Dewan (Kkomisaris/Direksi) tidak berhasil melaksanakan pikiran dan kearifannya. 15) Corruption and bribery in society. dan lain-lain). 12) Kompromi tidak etis oleh auditor eksternal. 6) Unmanageable geographic distribution. 14) Stock market manipulation and rigging. . 11) Deviant fraud risk management function. 13) Kemitraan yang tidak sehat dengan perbankan. 10) Informasi yang tidak andal. 4) Strategi pengembangan perusahaan berdasarkan angka keuangan tertentu (misalnya yang ditentukan CEO). 12) Unethical compromises by external auditors.5) Insufficient focus on organization culture and processes. 7) Ineffective human resources function 8) Breaches on internal controls. kekuasaan. 13) Unhealthy partnership by banks. 5) Kurang perhatian pada budaya perusahaan. Terjemahan bebas : 1) CEO berasa “lapar yang tidak terpuaskan” (bonus. 10) Lapes in information assurance. 2) CFO yang lemah (ia tidak berdaya di bawah CEO yang “lapar”). John Wiley & Sons.Dengan begitu pimpinan seperti ini memiliki sifat serakah yang keserakahannya dibiayai dari kecurangan di perusahaannya. Eccles. Hal tersebut tercermin seperti beberapa hal yang telah dijelaskan sebelumnya . ia melakukan manipulasi laporan keuangan. DiPiazza Jr (saat itu CEO dari PricewaterhouseCoopers) bersama Robert G. keserakahan atau greed menembus segala waktu dan tempat. DiPiazza Jr. Perbedaan dari kasus Satyam dengan Enron adalah : ! Entitasnya : Enron Vs Satyam ! Nasib Entitasnya : Bankrut Vs Diakuisisi ! Lokasi Entitasnya : Amerika Serikat Vs Diakuisisi ! Auditornya : Andersen Vs PricewaterhouseCoopers ! Nasib Auditornya : Meninggal Vs Bertahan ! Skala Kerugiannya : Sama-sama masif (secara proporsional dengan ukuran ektitas yang bersangkutan) Dari Skandal Satyam tersebut terlihat akan ketamakan.Dimana pemimpin tersebut bertangan besi dan rekan-rekan bawahannya takut kepadanya dimana mereka juga merupakan pengikut setia pimpinannya yang secara langsung menikmati hasil jarahannya. Eccles. baik itu di segi auditor internal maupun eksternal. 2002). Jika target laba dan target-target lainnya tidak tercapai. John Wiley dan Robert G. Building Public Trust : The Future of Corporate Reporting.3 Kesimpulan Kasus Satyam Computer Service di India tak ubahnya dengan kasus Enron.Dimana kasus Satyam ini dikenal sebagai Enron India. (Samuel A. Selain itu juga. skandal seperti ini dapat terjadi karena terjadi kelemahan di sektor audit. New York. Dimana hal tersebut terjadi seperti yang tertuang dalam buku ( diterbitkan 7 tahun sebelum kasus Satyam) yang menekankan pentingnya memulihkan kembali puclic trust atau kepercayaan publik yang merupakan hasil dari karya Samuel A. Dimana hal tersebut dapat terjadi karena adanya pemimpin perusahaan yang suka mengatur target laba dan kinerja keuangan lainnya. Fraudulent Statements seperti dalam menyajikan laporan keuangannya menyajikan asset atau pendapatan lebih tinggi dari yang sebenarnya (asset/revenue overstatements). seperti diantaranya yaitu : 1. . Conflicts of interess atau benturan kepentingan antara Satyam Computer Services dengan PricewaterhouseCoopers selaku auditor eksternalnya.bagaimana kinerja auditor baik internal maupun eksternal sangat tidak berguna. Check Tampering seperti pemalsuan-pemalsuan cek misalnya tentang sales/penjualannya yang meningkat dan di catatat di akun cash and bank yang tidak pernah dikonfirmasi dan di verifikasi oleh auditor. Billing Schemes seperti yang terbukti banyaknya transaksi fiktif yan disertakan dengan bill. Atau adanya penyembunyian informasi/tidak di jelaskannya tentang liabilitas atas pajak perusahaannya. seperti yang telah dijelaskan sebelumnya. 2. Dalam kasus Satyam ini terdapat beberapa fraud yang dilakukan. 3. 4. seperti contohnya tidak melakukan proses permintaan konfirmasi saldo bank. com/WhatHappenedatSatyam.slideshare. Weld.html Theodorus M. http://en. Penerbit Salemba. dan Lorraine Margarth. Tuanakotta. Akuntansi Forensik & Audit Investigatif. Penerbit Salemba.scribd.org/wiki/Mahindra_Satyam http://www. Peter M. Tuanakotta 2007. Mendeteksi Manipulasi Laporan Keuangan.Daftar Pustaka http://soniajaspal. “Anatomy of a Financial Fraud: A Forensic Examination of Health South”. Theodorus M. Setengah Abad Profesi Akuntansi.net/shinewithrohit/satyam-scandal-a-full-analysis .managedecisions. Bergevin. Theodorus M. http://www.pdf http://www. Dalam The CPA Journal.com/doc/16782318/Case-Study-of-Satyam-Scam http://www.com/2011/01/10/fraud-symptoms/. Leonard G. Edisi ke-2.wikipedia.antifraudnetwork.2010. 2013. Penerbit Salemba. Edisi ke-1.wordpress. Tuanakotta.com/blog/wpcontent/uploads/2010/07/Project_Term-Paper_SatyamScandal. LAMPIRAN . earnings per share. an Indian information technology service company with depository shares traded on the New York Stock Exchange (NYSE) during the relevant period. and accounts receivable in Satyam's public filed financial statements.. defendant Satyam Computer Services Limited deceived investors by falsifYing the company's revenue. The then-senior management at Satyam manufactured . Date: 4/5/2011 Description: General Civil COMPLAINT Defendant. Assign. v. Ellen S. directed the creation of over 6.the primary indicators upon which investors rely when making decisions about whether to purchase or sell company securities. income. UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA U. Then-senior officers and managers at Satyam. Washmgton DC 20549-5030 I Plaintiff. Satyam acknowledges that it falsely reported. • I 100 F St. From at least 2003 through September 2008. income. Case: 1:11-cv-00672 Assigned To : Huvelle. SECURITIES AND EXCHANGE COMMISSION. among other things. 2.S. among other items. SATYAM COMPUTER SERVICES LIMITED d/b/a MAHINDRA SATYAM. and interest bearing deposits -. NE. . revenue. over $1 billion in revenue in its publicly filed financial statements. Plaintiff Securities and Exchange Commission (Commission) for its complaint alleges as follows: SUMMARY 1.000 false invoices that they ensured were entered into the company's general ledger and falsely recorded as. practices.S.S. venue is proper pursuant to Section 27 of the Exchange Act. and order Satyam to pay a monetary penalty based upon its violations of the federal securities laws. Certain of the acts. §78aa]. This Court has jurisdiction over this action pursuant to Section 27 of the Exchange Act [15 U.c.S. 78m(a). 5. and courses of conduct constituting the violations oflaw alleged in this complaint occurred within this judicial district and. Defendant. therefore. The Commission requests. §§78j(b). JURISDICTION AND VENUE 4. record-keeping. The Commission brings this action pursuant to Section 21 (d) of the Securities Exchange Act of1934 (Exchange Act) [15 U. that this Court enjoin Satyam from committing further violations of the federal securities laws as alleged in this complaint. 78m(b)(2)(A). directly and indirectly. among other things.C. reporting. practices. 6. 7. Satyam's fraudulent accounting practices violated the anti-fraud. 13(b)(2)(A) and 13(b)(2)(B) ofthe Exchange Act [15 U. and 2 . and internal controls provisions of the federal securities laws. 3. When the fraud was revealed. This false information made Satyam appear to be substantially more profitable and financially sound than was actually the case.scores of false bank statements to reflect payment of the false invoices and created over $1 billion in fictitious cash balances and other interest bearing deposits. § 78u(d)]. and courses ofbusiness that violate Sections 10(b) and 13(a). acts. has engaged in transactions. the price of Satyam's depository shares plummeted and institutional investors located in the United States realized losses of over $450 million.C. including nine offices that it still maintains in the United States. including shares traded on the Bombay Stock Exchange. 2010. 2010.13a-1. 2010. As of March 31. and 65 million American Depository Shares (ADS). DEFENDANT 8. From March 31. 240. During the time period of the fraud.78m(b)(2)(B)] and Exchange Act Rules 10b-5. and 240. Satyam's equity shares underlying the ADS were registered pursuant to Section 12(b) of the Exchange Act.PK.lOb-5. 2010. Satyam's equity shares underlying the ADS are currently deemed Tegisteredpursuant to Section 12(g) of the Exchange Act. At all relevant times.F. 12b-20. through March 31. 9. the National Stock Exchange ofIndia. Satyam is a large information technology service company incorporated in the Republic of India with its principal executive offices in Hyderabad.13a-16].000 people worldwide and maintained offices across the globe. Satyam filed a Form 25 with the Commission voluntarily removing its securities from listing on the NYSE and from registration under Section 12(b). On September 29. Satyam's ADS represented between 11 and 20 percent of the company's total shares outstanding. 13a-l. 2010. 12b-20.176 billion total shares outstanding. 2010. 2004. §§240. and Satyam's ADS were listed on the NYSE. 2010 and 3 . and Satyam's ADS are currently quoted on the OTC Market under the symbol SAYCY. India. 2009 and March 31. On November 16. Satyam filed a Form 6-K containing its statement of annual audited financial results as per Indian GAAP for the fiscal years ended March 31. and 13a-16 thereunder [17 C. Satyam employed more than 50. On October 4. 240.R. Satyam had the equivalent of 1. Satyam filed a Form 6-K containing its statement of unaudited financial results as per Indian GAAP for the quarter ended June 30. Shortly after the fraud became public. a subsidiary of Tech Mahindra Limited." The company continues to be registered as a corporation doing business in the State ofNew York and as a foreign issuer with the 4 . an Indian infonnation technology competitor. 11. On February 14. Satyam filed a press release announcing "Mahindra Satyam" as the company's new "brand identity. Venturbay Consultants Private Limited. the Company Law Board of India authorized the company's new Board to select a strategic investor for Satyam. In a bidding process overseen by a retired Chief Justice of India. the Government of India assumed control of the company by dissolving Satyam' s existing Board of Directors and appointing new Government-nominated directors. 2011. purchased approximately 42 percent of Satyam's shares in India and became the new controlling shareholder of Satyam. 2010. was selected. 2010. In June 2009. consisting of executives associated with Tech Mahindra Limited. In mid-February 2009. Satyam's current Board of Directors consists of six members: three associated with Tech Mahindra Limited. Satyam has yet to restate its historical financial statements in the United States.2009 and March 31. In June 2009. Beginning in May 2009. two nominated by the Government of India. 10. Each of the three independent directors serves on the Audit Committee of the Board. Satyam installed a new senior management team.quarter & half-year ended September 30. Tech Mahindra Limited. Satyam filed a Fonn 6-K containing its statement ofunaudited financial results as per Indian GAAP for the quarter and nine months ended December 31. through Venturbay. 2010. and is currently delinquent in its Exchange Act reporting obligations having failed to file its Fonns 20-F for fiscal years ended March 31. and one other independent director. expenses are subtracted from revenues to calculate income. Satyam 's assets and liabilities at the end of each fiscal quarter and year. FACTUAL ALLEGATIONS Satyam's U.S. 5 . Since the establishment of the Government-appointed Board. Satyam's income statement reports. Reporting Obligations 12. and income earned for each fiscal quarter and year. These periodic financial reports include an income statement and a balance sheet. the company has taken significant remedial action and has cooperated in the SEC staffs investigation ofthe issues described in this complaint. among other things.· Satyam provides information technology services to a variety of customers Satyam prepares invoices for the services that it provides. Satyam's balance sheet reports. expenses incurred. submits the invoices to its customers. Satyam is required to submit periodic financial reports with the Commission on Forms 6-K (quarterly report) and 20-F (annual report). The data from the invoice management system is exported into Satyam's financial system where the revenues are recorded in the company's books of account. Within an income statement. 13. Satyam uses its books of account to prepare the financial statements that it submits to the Commission on Forms and 20-F. As a foreign issuer. and records the invoices in an electronic invoice management system. revenue recognized.Conimission under the name Satyam and files foreign issuer reports with the Commission· under the name Satyam. and continuing under Satyam's new management. Satyam made an initial public offering of ADS in the United States in May 2001. among other things. admitting that the company had been engaged in a billion dollar financial fraud involving. B. on January 7. real estate and infrastructure development companies then controlled by Raju and his brother. 2009. "[i]t was like riding a tiger. 2003 and ended on March 31. Satyam's ADS price fell more than fifty 6 . Satyam submitted a Form 6-K with the Commission that included a letter prepared by the then-Chairman of Satyam. 16." 17. Satyam's balance sheet reflected over $1 billion in fictitious cash and bank balances when the actual amounts were $66 million. 2008. Satyam's revenue for the quarter and operating margin were each overstated by approximately $125 million. the reporting of materially false revenue. Raju further admitted that he intentionally maintained Satyam ' s inflated revenue and profits because Satyam ' s promoters held a small percentage of equity and public knowledge of the company's "poor performance would result in a take-over" of the company. not knowing how to get off without being eaten." by having Satyam acquire a controlling interest in Maytas Properties and Maytas Infra (Maytas). For example. At all relevant times. According to Raju. According to Raju. Satyam's fiscal year 2004 began on April 1. Raju explained that as of September 30. After seven years during which its ADS traded on the NYSE. who was then the Managing Director and Chief Executive Officer ofSatyam. 2008. Following the announcement of the Maytas acquisition in India on December 16. Ramalinga Raju (Raju). thereby exposing the fraud. among other things. Raju also explained that he made a last attempt to ""fill" the company's "fictitious assets with real ones. Satyam' s Then-Chairman Confesses to Fraud 15. 2004. Satyam operated on a fiscal year that ran from April 1 through March 31.14. Satyam now has a new senior management team. The Satyam Fraud 20. including Raju. along with two lead engagement partners from Satyam's thenindependent auditing firm. as well as the transfer of the majority ofthe company's liquid assets to the Raju family. Satyam' s then-senior management provided certain employees with an administrative or "super user" login identification and password in 7 . his brother.55. After the close of the market. management knowingly and intentionally falsified the company's reported revenue by manufacturing false invoices for services never provided and. Satyam's ADS price closed at $5. are defendants.55. 2008. consisting of members formerly associated with Tech Mahindra Limited. The trial is underway. During a conference call held that morning. Satyam's ADS gained back fifty percent of their value to close at $8. 18. in a criminal trial in India arising out of the Satyam fraud. in some cases. investors and analysts questioned the investment into unrelated businesses during a worldwide recession. the former Senior Manager for Treasury. For five years from 2003 through September 2008.percent to open on the NYSE at $6. Satyam's then-senior . the former Chief Financial Officer.21 from the prior day's close of$12. the former Vice President for Accounts and Audits (Treasury and Tax). A significant number of former senior and mid-level executives of Satyam. Satyam's new controlling shareholder. Satyam also has replaced all of the Board ofDirectors that were in place during the fraud. the former Global Internal Audit Head and the former Assistant Manager for Invoicing. 19. Satyam abandoned the Maytas acquisition and on December 17.70 on trading volume of over 50 million shares. for customers that did not exist. Satyam's then-senior management were able to knowingly. and materially overstate revenue. the company's books of account. Satyam's then-senior management knowingly and intentionally submitted these materially false financial statements to the Commission on Forms 6. income. A complete failure of Satyam's internal controls over its invoice management system. but concealed the existence ofthe inyoices from the heads of Satyam's business units who would recognize that the services reflected on theinvoices had never been provided by their units and/or that their units had not done business with certain customers included on the fake invoices.. income. During these years. and interest bearing deposits from 2003 through September 2008. certain Satyam employees working at the direction of then-senior management generated on average 100 to 200 fake invoices per month in Satyam' s invoice managing system. 21.order to access the invoice management system to record the false invoices. earnings per share. and its reported financial statements occurred during 2003 through September 2008. and cash from the company's false books of account. 22..603 false invoices and record them in the company's invoice management system. The '"super user" login ensured that the invoices would be used in the calculation of revenue. Satyam's then-senior management knowingly and intentionally prepared financial statements that contained the materially false revenue. From 2003 through September 2008. earnings per share. intentionally. 8 . The invoice management system exported these 6. Satyam's then-senior management knowingly and intentionally instructed certain employees to generate 6.K and 20-F. As a result. cash.603 invoices into Satyam's financial system where the revenues were recorded in the company's books of account. Fonn6-K· Fonn6-K Fonn 6-K Fonn6-K Form20-F Q12005 Q22005 Q32005 Q42005 ]11 63 69 208 451 $174.000 $1.000 $275.000 Fonn6-K Fonn6-K Fonn 6-K Form6-K Fonn20-F Q12008 022008 Q32008 042008 473 .760.000 $134.020.550..840.850.040.000 $188.000 $14.000 $133.000 $562.000 $164.270.000 $78.000 $142.680.400.096.300. Based upon the fictitious invoices.000 $149.2008 Total 2009 Total Grand Total 9 .990.345.461.000 $1.000 $1.000 $30.000 $281.390.000 .000 $35.980.600.000 Fonn6-K Forin 6-K Fonn 6-K Fonn 6-K Fonn20-F Q12007 Q22007 Q32007 042007 ]2 30 237 375 654 $322.000 $1.000 $151.000 $652.000 $30.000 $352.650.000 $22. intentionally.850.000 $566.000 $19. and materially overstated revenue from fiscal year 2004 through the first two quarters of fiscal year 2009 by $ 1.500.050.$509.860.000 $375.000 $300.000 $411.000 $47.122.100.600.000 Fonn6-K Fonn 6-K Fonn6-K Fonn6-K Form20-F Q12006 Q22006 Q32006 Q42006 249 242 29] 398 1180 $246.130.000 $11.670.000 Fonn6-K: Form6-K Form6-K Fonn 6-K Fonn20-F Q12009 022009 791 777 1558 $637.980.330.000 $430.220.900.23.300.700.000 .920.000 $1.600.000· .300.500..000 Fonn6-K Fonn 6-K 6603 $7.100.000 $267.500.000 All of the above Total 2005 Total 2006 Total 2007 Total .000 $30. Investors routinely rely upon a company's reported revenues when making investment decisions.300..000 $225.070.000 $793.300. Satyam's unaudited materially false revenue is set forth in the chart below: Fiscal Year Quarter False Invoices Published Revenue False Revenue False Commission Filin2s 2004 Q12004 022004 Q32004 042004 97 8 50 112 267 $121. Satyam's then-senior management knowingly.070. $79.500.000.000 $131.320.050.000 $69.780.000 $204.810..000 $46.000.250.000 $8.190.450.000 $613.000 $68. 486 730 794 2483 $452.370.390.200.289.030.000 $35.000 $8.360.000 $148.860.000 $141.1 billion.000 $29.000 $2138.970.000 $53.840. 000 of additional false revenue. Satyam's then-senior management knowingly and intentionally reported $58. by· generating and recording 27 additional fake invoices that did not involve the use of the . Satyam's then- senior management also knowingly. and materially overstated the company's earnings per share from fiscal year 2004 through the second quarter of fiscal year 2009.160. Consistent with the reporting of materially false revenue. EPS was consistently decreasing from fiscal year 2005 through the first two quarters of fiscal year 10 . not included above. During fiscal year 2007.24. Satyam 's then-senior management reported that the company's net income was consistently increasing when. in fact. Satyam reported hundreds ofmillions of dollars of net income. Investors routinely rely upon net income to assess the profitability of a particular company when making investment decisions. intentionally. Satyam's thensenior management reported near constant increases in EPS when. 26. and materially reported false net income of almost $1 billion on the company's publicly filed financial statements from fiscal year 2004 through the second quarter of fiscal year 2009. intentionally. in fact. when in fact the company's actual net income was less than zero. EPS is an important measure of a company's strength and profitability and is routinely relied upon by investors in making investment decisions. During this time. super-user function: 25. During the last two quarters of fiscal year 2008 and the first quarter of fiscal year 2009. During this time. Satyam's then-senior management knowingly. Satyam's then-senior management used the reported false net income to calculate earnings per share (EPS). Satyam's net income was decreasing. EPS is calculated by dividing net income by the weighted average of a company's outstanding shares of stock. 824 $86.394 BoB Balance Overstatement (Fraudulent) Reported Cash & Cash Equivalent· Balance per SEC Filings $60.904.730.232 $10.598 $218.740 $211.000 $290. among other places. intentionally.500.400.913 $79.159 $203.937.800. The chart below illustrates the actual balances in Satyam's BOB account compared to the balances that Satyam's then-senior management knowingly and intentionally reported in the company's publicly filed financial statements: Fiscal Year End Balance per (BoB) Statements 3/3I/04 3/3I/05 3/3I/06 3/3I/07 3/3I/08 9/30/09 $3.287.775.506.635.972.811 $67. Citibank.514 $10. and materially falsified the company's publicly filed financial statements with regard to the balance and interest of fixed deposit receipts in accounts held at HSBC.000 $433. 27.000 To make it appear that the company was investing its false income during the time period ofthe fraud. from fiscal year 2003 through September of2008. Satyam' s then-senior management knowingly. Satyam's materially overstated balances and interest income are detailed in the chart below: 11 .652.103 $11. the Bank of Baroda (BOB) which were recorded within the cash and cash equivalent balances in the publicly filed financial statements.389.452.836. HDFC.420 $72.673 $214.288.858 $6.652 $82.068 $379.612. reflecting materially false cash deposits in the company's bank accounts at. and ICICI.533.000 $152. Satyam' s then-senior management knowingly and intentionally prepared materially false bank statements.569 BoB Balance PerSatyam $64.268.684. To support the false revenue and income that Satyam was reporting in the company's financial statements.000 $129.192.283 $368.000 $292.2009.200.800. PNB Paribas.953.784 $10. From at least October 23.487. Fiscal Year End Reported Balance and Interest 3/31/04 3/31/05 3/31/06 3/3·1/07 3/31/08 9/30/08 $252.642. the false press releases made it appear to investors that Satyam was more profitable and financially strong than was actually the case.450. Satyam' s then-senior management submitted 27 materially false press releases to the public. Satyam's then- senior management knowingly and intentionally provided materially false information on least 20 occasions regarding Satyam' s financial performance or the purpose ofthe failed Maytas acquisition to Wall Street analysts during quarterly conference calls.209 $406.199 $417.605.28.365.022.067.546 Fraudulent Balance and Interest $247.770 $13.956 $784.812 $2. following Raju's confession to the massive financial 12 .511.436 $26. 30. During this time period.756.348 $2.807.966 Satyam included a press release detailing the company's quarterly and annual performance with each quarterly and annual report that it submitted to the Commission.2003 through December 16.619 $912.174 $780. Satyam' s then-senior management knowingly and intentionally submitted press releases that materially misrepresented the overall financial performance ofthe company. On January 7. from fiscal year 2004 through the second quarter of fiscal year 2009.660.722. The materially false statements made during the conference calls made it appear to the analysts that Satyam was substantially more profitable than was actually the case.391. 29.519 $416.271 $910.144 $782.645 $432. Like the false financial statements.2009. Consistent with its false financial statements.511 Actual Balance and Interest $4.680 $260. These analysts used this false information in making recommendations to investors about Satyam's securities.369.117.404 $767.210.2008.210. 32.2009. From 2003 through December 2008. knowingly or recklessly.· or by the use of the mails and of the facilities of a national securities exchange. During the course of the fraud. SatYam ADS investors suffered significant losses as a result of the fraud. by use ofthe means or instrumentalities of interstate commerce. Paragraphs 1 through 32 are realleged and incorporated by reference herein.35. the public. When trading resumed on January 12. the NYSE suspended trading in Satyam's ADS. schemes. Satyam's ADS price dropped by nearly 85 percent to close at $1. directly or indirectly. 13 . Mutual funds managed by one institutional investor suffered realized losses of nearly $200 million. and Wall Street analysts that made the company appear more profitable and financially strong than was actually the case. Satyam's then-senior management responsible for the fraud knowingly and intentionally made materially false and misleading statements to the Commission. ADS institutional investors realized losses of over $450 million.46 on trading volume of over 95 million shares. in connection with the purchase or sale of securities: (a) employed devices. ' As set forth more fully above.fraud. At the time. Satyam. Satyam's ADS traded at a price of$9. Satyam was able to maintain its share price at the expense of company's shareholders who lost hundreds ofmillions of dollars. or artifices to defraud. Satyam was able to maintain its customer base as well as add new customers to its operations. CLAIMS FOR RELIEF FIRST CLAIM Satyain Violated Exchange Act Section IOCb) and Exchange Act Rule IOb-5 33. 31. Additionally. In total. 3 4 . 38. 36. 13a-16. or were reckless in not knowing. not misleading. § 240. and 12b-20 37. and Exchange Act Rule lOb-5 [17 C. Satyam violated Section 1O(b) of the Exchange Act [15 U. SECOND CLAIM Satyam Violated Exchange Act Sections 13(a). or (c) engaged in acts. Paragraphs 1 through 36 are incorporated herein by reference. 14 .10b-5]. in the light of the circumstances under which they are made. as may be necessary to make the required statements. 13(b)(2)(A) and 13(b)(2)(B) and Exchange Act Rules 13a-1. in reasonable detail. records. By reason of the foregoing. Section 13(a) of the Exchange Act and Rules 13a-l and 13a-16 thereunder require issuers ofregistered securities to file with the Commission factually accurate annual and quarterly reports. 39. 35.(b) made untrue statements ofmaterial facts or omitted to state material facts necessary in order to make the ·statements made.C. They knew.R. practices. if any. Satyam and members of Satyam's then-senior management acted knowingly or recklessly in connection with the above described acts and omissions. not misleading. § 78j(b)].S. and accounts which. Exchange Act Rule 12b-20 provides that in addition to the information expressly required to be included in a statement or report. in the light of the circumstances under which they were made. there shall be added such further material information.F. accurately and fairly reflect the transactions and dispositions of the assets of the issuer. Section 13(b)(2)(A) of the Exchange Act requires issuers ofregistered securities to make and keep books. or courses of business which operate or would operate as a fraud or deceit upon any person. (hat the above-mentioned filings with the Commission and statements to the public and analysts contained material misstatements and omissions. 15 . Imposing civil monetary penalties on Satyam pursuant to Section 21 (d) of the Exchange Act. 78m(b)(2)(A). Permanently restraining and enjoining Satyam from violating Section 1O(b) of the Exchange Act and Exchange Act Rule 10b-5. devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that the Company's transactions were recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles. and 13(b)(2)(B) of the Exchange Act [15 U.b-20].R. Satyam violated Section 13(a). 240. 13(b)(2)(A). and 13a-16. and 78m(b)(2)(B)] and Exchange Act Rules 13a-l.13a-l.S.F. the Commission respectfully requests that this Court enter Orders: A. Permanently restraining and enjoining Satyam from violating Section 13(a). among other things. 13a-16. and 240.13a-16. §§240. 13(b)(2)(A). PRAYER FOR RELIEF WHEREFORE. 13a-l. 40.Section 13(b)(2)(B) of the Exchange Act requires such issuers to.C. B. By reason of the foregoing. C. and 13(b)(2)(B) of Exchange Act and Exchange Act Rules 12b-20. and 12b-20 [17 C. §78m(a). Muoio James J. Date: April 5.D. Bar No. Ordering.2011 Respectfully Cheryl J c rboro (D. Securities and Exchange Commission 100 F Street. pursuant to Section 308 ofthe Sarbanes-Oxley Act of2002. Valentino Jeffrey Leasure Counsel for the Plaintiff U.S. and E. 422175) Jan M. Folena Reid A.C. NE Washington. Granting such other and additional relief as this Court may deem just and proper. DC 20549 (202) 551-4403 (telephone Scarboro) 16 . that the amount of Civil penalties ordered against and paid by Satyam be added to and become part of a fund for the benefit of the victims ofthe violations alleged in this complaint.