Satyam is a company that specializes in information technology, business services, computer software, and is a leading outsourcing company in India. The company grew quickly during the 1990s and 2000s as more and more companies around the world looked to India for outsourcing solutions. It eventually became the fourth largest outsourcing company in India. Satyam provides solutions to approximately 185 Fortune 500 companies throughout the world. The business community recognized Satyam as a global leader in information technology outsourcing.

Satyam was as an example of India's growing success. It won numerous awards for innovation, governance, and corporate accountability. Unfortunately, less than five months after winning the Global Peacock Award which is a World Council for Corporate Governance, Satyam became the centerpiece of a massive accounting fraud.

As stock markets around the world collapsed during 2008, the Indian Stock Exchange fell enormously. The enormous losses caused investors to withdraw large amounts of cash from their investments. These cash withdrawals in turn triggered the discovery of several cases of financial fraud as perpetrators could no longer hide the results.

Mr. Raju, the founder of Satyam, and the company's global head of internal audit used a number of different techniques to perpetrate the fraud. He created numerous bank statements to advance the fraud and falsified the bank accounts to inflate the balance sheet with cash balances that never existed. He also inflated the income statement by claiming interest income from these fake bank accounts. Satyam also understated liabilities on its balance sheet and overstated income nearly every quarter over the course of several years in order to meet analyst expectations. Mr. Raju also revealed that he created 6,000 fake salary accounts over the past few years and appropriated the money after deposit. Also, the company's global head of internal audit created fake customer identities and generated fake invoices against their names to inflate revenue while the global head of internal audit also forged board resolutions and illegally obtained loans for the company. Overall, Mr. Raju claimed that he overstated assets on Satyam's balance sheet by $1.47 billion. As a result, nearly $1.04 billion in bank loans and cash that the company claimed to own was nonexistent.

The Indian stock market fell dramatically upon the disclosure of the Satyam scandal. Indian authorities quickly started an investigation and pursued criminal actions that ensnarled Satyam's executives, auditors, and Indian politicians.

The news of the scandal rocked the Indian stock exchanges. On the day that the scandal broke, Satyam's stock lost 82 percent. It also had major impact on Satyam’s business with its clients where in a lot of their clients migrated into their competitors. The revelations have caused a major shake-up in India’s enormous outsourcing industry and have forced many large companies to investigate and revamp their back offices.

The government appointed a new board of directors for Satyam to try to save the company. The Board's goal was to sell the company within 100 days. To devise a plan of sale, the board met with bankers, accountants, lawyers, and government officials immediately. It worked diligently to bring stability and confidence back to the company to ensure the sale of the company within the 100-day time frame. Several companies bid on Satyam on April 13, 2009. The winning bidder, Tech Mahindra, bought Satyam for $1.13 per share—less than a third of its stock market value before Mr. Raju revealed the fraud—and salvaged its operations.

The scandal raised questions over accounting standards in India as a whole, as observers asked whether similar problems might lie buried elsewhere. The risk premium for Indian companies rose in investors’ eyes.