The Satyam Computer Services scandal was one of the biggest corporate frauds in India's history. It involved the manipulation of the company's accounts by its founder and chairman, Byrraju Ramalinga Raju, and his associates. They inflated the company's revenues, profits, cash balances, and employee numbers, and siphoned off large sums of money for their personal use. The fraud was exposed in January 2009, when Raju confessed in a letter to the regulators and the shareholders. The scandal had severe consequences for the company, its investors, its clients, and the Indian IT industry. The company was taken over by Tech Mahindra in April 2009, and renamed as Mahindra Satyam. The company merged with Tech Mahindra in June 2013, creating India's fifth largest software services company. Raju and nine others were convicted and sentenced to seven years in prison in April 2015.
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- The Satyam scandal also raised questions about the role and responsibility of the auditors, who failed to detect the fraud for several years. The Indian arm of PricewaterhouseCoopers (PwC), which audited Satyam's accounts, was fined and banned by the regulators for professional misconduct.
- The Satyam scandal was a major blow to the reputation and credibility of the Indian IT industry, which was already facing challenges due to the global financial crisis of 2008. The scandal eroded the trust and confidence of the clients, investors, and regulators in the Indian IT sector, and affected its growth and competitiveness.
- The Satyam scandal also triggered several reforms and initiatives by the government and the industry bodies to prevent such frauds in the future. These included strengthening the corporate governance norms, enhancing the oversight and regulation of the auditors, improving the disclosure and transparency standards, and promoting ethical and responsible business practices.
The Punjab National Bank (PNB) scandal is one of the biggest bank frauds in India's history. It involves fraudulent letters of undertaking (LoUs) worth ₹12,000 crore (US$1.4 billion) issued by PNB's Brady House branch in Mumbai to firms related to jeweller Nirav Modi and his uncle Mehul Choksi¹. The LoUs were used to obtain loans from overseas branches of other Indian banks, without any collateral or credit limit. The fraud was allegedly carried out with the collusion of some PNB officials, who bypassed the bank's core banking system and used the SWIFT network to send the LoUs.
The fraud came to light in January 2018, when a new employee of PNB noticed the irregularities and reported them to the bank's management. PNB then filed a complaint with the Central Bureau of Investigation (CBI), which launched a probe into the scam. The Enforcement Directorate (ED) also joined the investigation and began attaching assets of the accused. The Reserve Bank of India (RBI) also issued circulars and caution notices to banks regarding the reconciliation of SWIFT messages and core banking systems.
Nirav Modi and Mehul Choksi, along with their family members and associates, fled the country before the scam was exposed. They are currently facing extradition proceedings from various countries, including the UK, Antigua and Barbuda, and Dominica. The CBI has filed several chargesheets against them and their accomplices, including former PNB officials, for cheating, criminal conspiracy, corruption, and money laundering. The scam has also raised questions about the oversight and regulation of the banking sector in India, and the role of auditors and rating agencies in detecting and preventing such frauds.
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