The IUP Journal of Corporate Governance, Vol. IX, No. 4, 2010 30 Satyam Fiasco: Corporate Governance Failure and Lessons Therefrom The concept of Corporate Governance (CG) is, now, more than a decade old in India. However, the inadequacy and inefficacy of the governance framework in the country has been espoused by the massive corporate disaster—Satyam. The fiasco has brought into limelight the inherent shortcomings in the present corporate regulatory system that has been benchmarked on the CG structure of the United States (US) and United Kingdom (UK). In this backdrop, this article makes an effort to look at events that precipitated the Satyam fiasco and the loopholes in the system that enabled the fraud to occur. The present study also proposes to provide insights into the legislature in formulating provisions for curbing such corporate mishaps that obliterate investor confidence, particularly so when our country is desperate to draw on foreign capital to propel its economic growth. Introduction The concept of Corporate Governance (CG) is more than a decade old in India. However, the inadequacy and inefficacy of the governance framework in the country has been espoused by the massive corporate disaster—Satyam. The fiasco has brought into limelight the inherent shortcomings in the present corporate regulatory system. ‘Satyam’ that means ‘truth’ in Sanskrit will always be remembered for, perhaps, the largest corporate scam to engulf this nation and which may carry the label of ‘India’s Enron’ (The Economist, 2009). Possibly, the only silver lining of this corporate catastrophe is to expose the hardcore truth of the extant CG scenario in India to the millions of stakeholders. Satyam Computers Services Limited (Satyam) was founded by B Ramalinga Raju in 1987, to provide services in the Information Technology (IT) sector. It soon prospered to become the country’s fourth largest software company with a customer base spread across 66 countries. Stocks of Satyam were traded in the Bombay Stock Exchange (BSE), National Stock Exchange (NSE), New York Stock Exchange (NYSE) and Euronext (Amsterdam, Europe). Satyam featured at the 185 th rank in the list of Fortune 500 companies at the time of the fiasco (The Economist , 2009). * Professor, Department of Management Studies, Indian Institute of Technology Roorkee, Roorkee 247667, Uttarakhand, India. E-mail: jatinfdm@iitr.ernet.in, jpsiitr@gmail.com ** Research Scholar, Department of Management Studies, Indian Institute of Technology Roorkee, Roorkee 247667, Uttarakhand, India. E-mail: navksddm@iitr.ernet.in, naveensrivastav@gmail.com *** Research Scholar, Department of Management Studies, Indian Institute of Technology Roorkee, Roorkee 247667, Uttarakhand, India. E-mail: suzmaddm@iitr.ernet.in, shigufta.uzma@gmail.com © 2010 IUP. All Rights Reserved. J P Singh*, Naveen Kumar**, Shigufta Uzma***