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Sathyam Company Essay

Introduction

The topic focuses on the companies which faced business loss during their period of their business cycle and how they recovered from the failure. The first company taken here is Sathyam Company, Software Company and the second organization is Ajman Bank.

Sathyam Profile

Sathyam Company is a based on Information technology mainly dealing with software products like product development, ERP solutions, hosting services and so on. The company is operating in India, Japan, Singapore, USA and the UK having client all over the world.

Satham – Reason for failure

The reason for the company to face the business loss will mainly fell on the founder of the company Ramalinga Raju. Rs 8000 crore. The founder of the company show false accounts and give fake reports to share holders which made them to invest more on the company. When the government found the fact that the founder made a fraud and that caused loss of about 10,000 crore in market capitalization.

Action taken on Sathyam

Then the action was taken by SEBI and Board of directors on the person who has created inflating profits and builds fictitious wealth which is no more in reality. As per Ramalinga Raju it is the Maytas acquisition is one of the solution he thinks himself that he can gain the profits of Maytas and can make the fictitious assets in reality. Because of these consequences Sathyam is removed from Nifty and Sensex.

Recommendations

  • Government took Sathyam with all the losses and work out with the profit gained through Maytas.
  • The company is analyzed and given a detailed report to proceed with acquisition and finally company is now working in stable company with the same employees without ambiguity.

Ajman Bank – Profile

The bank is founded and supported by Government of Ajman which has its holding of 25% and started the bank with the capital of AED 1 billion. The bank had the aim of becoming UAE’s favorite service provider bank. The bank wants to penetrate to the market with expanding strategy for financial products with innovative products. The bank treats customers as masters and develops various services to attract them.

Ajman Bank – Reason for failure

The loss was caused due to public offering of bank the first day then stock of offered with smart price of 1 dirham (Dh) which happened during Dubai trading day. From the second day Ajman bank started losing the market share which is almost 15% lower at Dh 2.87. As per the analysts reports it is that the bank faced the failure because investors are rapidly booking profits where the business were started only on September. This drop of Ajman had an impact on the performance of the Dubai bourse.

Recommendations

  • The bank took measures to revise their shares prices and raise funds through Dubai government in order to balance the losses.
  • The bank allocated separated funds in promoting the truth to the public so that bank will not lose its good will. This is the measure taken to retain the existing customers.

Conclusion

Business loss is unexpected event in any of the business. It the way how business is taking the failure and regaining back to its form that paves the way for success of the business. The pillars of any business should be strategy, structure and implementation ways through which no external factors can create loss to business.

Reference

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http://forums.sureshkumar.net/satyam-placement-papers/18781-satyam-company-profile.html

http://www.thehindubusinessline.com/2009/01/08/stories/2009010851881000.htm

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