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Satyam Scam: Ethics and Corporate Fraud

The Satyam scam involved fraudulent accounting practices at Satyam Computer Services led by its founder Ramalinga Raju. Raju inflated the company's accounts for years, misrepresenting financial information provided to shareholders, regulators, and other stakeholders. His actions violated principles of ethics like duty and moral obligation. While the deception benefited the company in the short term, Raju failed to consider the long-term consequences, leading to the company's collapse when the fraud was revealed. His conduct contradicted the virtues and principles Satyam claimed to uphold, such as honesty and integrity, acting out of personal greed rather than ethical responsibility.

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115 views2 pages

Satyam Scam: Ethics and Corporate Fraud

The Satyam scam involved fraudulent accounting practices at Satyam Computer Services led by its founder Ramalinga Raju. Raju inflated the company's accounts for years, misrepresenting financial information provided to shareholders, regulators, and other stakeholders. His actions violated principles of ethics like duty and moral obligation. While the deception benefited the company in the short term, Raju failed to consider the long-term consequences, leading to the company's collapse when the fraud was revealed. His conduct contradicted the virtues and principles Satyam claimed to uphold, such as honesty and integrity, acting out of personal greed rather than ethical responsibility.

Uploaded by

ShivamKhare
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

What is the Satyam scam about?

It is about corporate governance and fraudulent auditing practices allegedly


in connivance with auditors and chartered accountants. The company
misrepresented its accounts both to its board, stock exchanges, regulators,
investors and all other stakeholders.

  Deontology: is the study of that which an “obligation of duty and consequent action based

on moral judgment determine whether the person, business or any actor has complied

to.

Ramalinga Raju actions were ethically in contrast with what is expected from the leader

of any organization. He put his greed and ambitions before his duties towards his

company, employers and stakeholders and did not hesitate from falsifying the

accounting books for years ignoring all moral obligations towards them.

·       Consequentialism26: is the judgment on right or wrong based on the consequences of

action taken or conduct of individual, company et al.

It is quite evident that Ramalinga Raju’s letter inflated numbers in his Account books, he

miscalculated the consequences of his unlawful actions in long term. Since company

was doing well in terms of business (on papers) stakeholders were happy, Raju chose

to conveniently overlook the approaching disaster. In his own words “It was like riding a

tiger without knowing how to get off without being eaten” After his last attempt to fill the

fictitious asset with real ones failed, he had to come face to face with the disastrous

consequences of his unethical actions.

Virtue Ethics29: Satyam prescribed itself to some great virtues and principles, though
their conduct is completely opposite of what they claim to be. Ramalinga Raju flouted
every rule in the book of corporate governance to fulfill his hunger and greed for power
and money. If the conduct was ethical it would act parallel to the virtues expected by
stakeholders. Out here virtues like Sustainability, Honesty and Integrity were only
preached but not practiced. The act is based more on greed of making profits at the cost
of shareholder’s money.

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