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February 12, 2009

Satyam: The Great Deception

Dear All,

The extent and audacity of what transpired at Satyam Computer Services in January, culminating in the historic confession letter of former chairman B Ramalinga Raju, admitting a fraud of US$1.6 billion, has caused investors and regulators everywhere to re-examine corporate governance standards.

Need has now arisen to introspect into how this happened and whether the current laws are adequate to counter such frauds? The Indian corporate governance regime is fairly detailed and similar to most developed countries. It is for this reason that stakeholders need to be more careful post-Satyam, because if a Satyam can happen in India, it can happen elsewhere as well. A post mortem is clearly essential. Where did the systems fail? Whose fault was this? Will the shareholders and investors receive any pecuniary compensation for the losses that they suffered? A detailed insight into the corporate governance regime is much warranted. Satyam does offer salutary lessons to companies across the globe.

We, at Nishith Desai Associates, in step with our tradition of being a research oriented law firm have attempted to answer these questions and in that stride, analyzed certain key aspects of the scandal.

Please click here to view our article “Satyam: The Great Deception” written by Ruchir Sinha and Nishchal Joshipura of Nishith Desai Associates in collaboration with Asialaw (www.asialaw.com) which not just provides a detailed step by step insight into what and how did Satyam happen, but also what should be the next steps for the regulators and those vested with corporate responsibility to ensure that a Satyam is never repeated.

Asialaw is one of the most prestigious legal journals in the Asian legal market, and the article “Satyam: The Great Deception” features as the cover story for Asialaw’s February edition.

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