FREE! Click here to Join FunTrivia. Thousands of games, quizzes, and lots more!
Quiz about Wrong Business Moves
Quiz about Wrong Business Moves

Wrong Business Moves Trivia Quiz


Ten questions on scams and bankruptcies that have rocked Indian companies due to the bad business decisions made by the people heading them.

A multiple-choice quiz by zorba_scank. Estimated time: 5 mins.
  1. Home
  2. »
  3. Quizzes
  4. »
  5. World Trivia
  6. »
  7. Business World

Author
zorba_scank
Time
5 mins
Type
Multiple Choice
Quiz #
353,743
Updated
Dec 03 21
# Qns
10
Difficulty
Average
Avg Score
6 / 10
Plays
387
-
Question 1 of 10
1. Which Indian software company sent shockwaves round business circles in January 2009 when its founder and chairman, Ramalinga Raju, admitted to having perpetrated accounting fraud by inflating profit and creating fictitious assets? Hint


Question 2 of 10
2. In a bid to promote their brand in Britain, poultry company Venky's went ahead and bought which football club? Hint


Question 3 of 10
3. Suzlon Energy, a renewable energy company, found itself in trouble when the timing of its two large foreign acquisitions coincided with the global financial crisis in 2008. The company was one of the market leaders in which of the following renewable energy segments? Hint


Question 4 of 10
4. The Indian company, Subhiksha, had been formed in 1999 and over the years expanded successfully enough to attract investments from ICICI Ventures and well known businessman, Azim Premji. Things first began to go wrong when the company approached its lenders for a breather from debt repayment in 2008 before further investigations revealed that there were deeper problems. In which business segment did Subhiksha operate? Hint


Question 5 of 10
5. Inspired by Bangladeshi Nobel Peace Prize winner Muhammad Yunus' concept of microfinance which created a new source of funding for the poor, Vikram Akula founded SKS Microfinance in India in 1998. The company initially took off very well becoming the first institution of its kind to successfully list on the stock exchanges. However, a clampdown on such lending by which Indian state in 2010 adversely impacted the company? Hint


Question 6 of 10
6. Speak Asia claimed to be an online survey business where, after paying a registration fee, users were assured a certain monthly income for taking surveys on the internet. Additional commissions could also be earned by referring more members to join the scheme. What term, named after an Italian conman who operated in the United States in the early 20th century, is used to describe such a fraudulent scheme? Hint


Question 7 of 10
7. Which global sports apparel giant filed a case against its Indian subsidiary's senior management team in 2012 citing fraud? Hint


Question 8 of 10
8. This Indian company was one of the early movers in the manufacturing of recordable compact discs and enjoyed a dream run in its initial phases. Unfortunately, the technology was soon developed by other competitors and the company was unable to match the low cost products manufactured in countries like China. With the prices of compact discs crashing, which of the following companies found itself struggling to manage its operations? Hint


Question 9 of 10
9. South Indian media company Deccan Chronicles was well established with its English language newspaper having significant circulation numbers. However, the promoters' decision to sponsor a sports team didn't end up being too well thought out. In which popular Indian sport did the company purchase a franchisee? Hint


Question 10 of 10
10. Which private Indian airlines, promoted by liquor baron Vijay Mallya, had to have its debt restructured by lenders in 2010 due to continued losses? Hint



(Optional) Create a Free FunTrivia ID to save the points you are about to earn:

arrow Select a User ID:
arrow Choose a Password:
arrow Your Email:




Quiz Answer Key and Fun Facts
1. Which Indian software company sent shockwaves round business circles in January 2009 when its founder and chairman, Ramalinga Raju, admitted to having perpetrated accounting fraud by inflating profit and creating fictitious assets?

Answer: Satyam Computer Services

Until late 2008, Satyam was considered one of the leading software companies in India posting strong growth and profit numbers every year. Concerns were first raised when the company announced the acquisition of two promoter-
driven companies that were involved in unrelated businesses of real estate and infrastructure development. The acquisition cost stated seemed to be inappropriate and shareholders and institutional investors opposed the move which did not appear to be in the best interests of the company and favoured the promoters instead.

While the company gave in and withdrew this proposal, in early January 2009, Raju wrote a letter to the employees confessing to having fudged the accounts of the company. It emerged that profits had been overstated for the past few years and fictitious accounting entries had been created to hide the fraud. During the time of disclosure, Raju admitted that almost 94% of the cash balance reflected in the company's books were fictitious. The fraud was even more startling considering that the company was also listed on the New York Stock exchange, counted large global institutions among its investors and had PricewaterhouseCoopers as its auditor.

Ironically the founder and chairman, Ramalinga Raju, had earlier been awarded the Golden Peacock award for excellence in Corporate Governance.
2. In a bid to promote their brand in Britain, poultry company Venky's went ahead and bought which football club?

Answer: Blackburn Rovers

Venky's is part of an Indian conglomerate with interests largely in poultry and processed food. Having a well established presence in the Indian market, the company decided to expand its presence overseas. Believing that the purchase of a football club would help the brand to build visibility, the group bought a 99.9% stake in the Blackburn Rovers football club in November 2010 at a cost of 43 million pounds. The deal was largely funded through debt raised by the flagship companies of the group.

Unfortunately for the group, this move appears to have backfired with the club being relegated in the 2011-12 season after narrowly missing it in the previous season. Angry fans protested against the mismanagement of the new owners by setting a chicken draped in the team's flag loose on the ground during a match.
3. Suzlon Energy, a renewable energy company, found itself in trouble when the timing of its two large foreign acquisitions coincided with the global financial crisis in 2008. The company was one of the market leaders in which of the following renewable energy segments?

Answer: Wind power

Suzlon Energy was one of the top five wind turbine manufacturers in the world with a presence in all six inhabited continents. The company's acquisitions of Belgium's Hansen Transmissions and Germany's REpower, though believed to add synergy to its existing operations, turned out to be mistimed.

The huge debt of $2 billion was raised largely through Foreign Currency Convertible Bonds (FCCBs). The global financial crises in 2008 and the subsequent collapse of Lehman Brothers reduced the funding options available for wind energy. Even the increasing threat of global warming didn't lead to additional benefits being proposed by various countries for the renewable energy sector. Unable to manage its high debt, the company eventually sought help from its bankers by submitting itself to the Corporate Debt Restructuring cell.
4. The Indian company, Subhiksha, had been formed in 1999 and over the years expanded successfully enough to attract investments from ICICI Ventures and well known businessman, Azim Premji. Things first began to go wrong when the company approached its lenders for a breather from debt repayment in 2008 before further investigations revealed that there were deeper problems. In which business segment did Subhiksha operate?

Answer: Organised retail

Subhiksha was considered one of the first companies to successfully navigate the Indian organised retail segment. By 2008, the company had over 1500 outlets across the country selling fresh fruit and vegetables and other groceries. When the company first approached its lenders for debt restructuring, aggressive expansion was deemed to be the primary cause of its financial problems. Later it emerged that its troubles were not so simple and there were serious violations including manipulation of accounts, siphoning off money to paper companies and other financial irregularities.
5. Inspired by Bangladeshi Nobel Peace Prize winner Muhammad Yunus' concept of microfinance which created a new source of funding for the poor, Vikram Akula founded SKS Microfinance in India in 1998. The company initially took off very well becoming the first institution of its kind to successfully list on the stock exchanges. However, a clampdown on such lending by which Indian state in 2010 adversely impacted the company?

Answer: Andhra Pradesh

Though SKS Microfinance was the pioneer, its successful business model led to several other institutions catering to the funding needs of the poor through microfinance. The model commonly used by these companies entailed the creation of various Self Help Groups (SHGs) in villages. The loans taken by the borrowers became the collective liability of the group and peer pressure helped to ensure that the villagers didn't default on their repayment obligations. It was initially envisaged that the poor would use these loans as seed capital to develop some permanent source of income. For instance, women used the money to buy sewing machines which helped them start small tailoring businesses.

Majority of these microfinance institutions (MFIs) were concentrated in the state of Andhra Pradesh. This eventually led to the same borrower availing of loans from 2-3 different companies leading to high leverage. With the recession hitting in 2008, most of the borrowers found themselves unable to repay the loans. It was also alleged that peer pressure and the recovery agents of these institutions drove some of these defaulters to commit suicide leading to the state government of Andhra Pradesh imposing strict regulations on the functioning of these MFIs.
6. Speak Asia claimed to be an online survey business where, after paying a registration fee, users were assured a certain monthly income for taking surveys on the internet. Additional commissions could also be earned by referring more members to join the scheme. What term, named after an Italian conman who operated in the United States in the early 20th century, is used to describe such a fraudulent scheme?

Answer: Ponzi

A Ponzi scheme is dependent on constantly adding new investors as the money invested by them is used to pay the assured returns to the earlier investors. The scheme collapses when the new investments are not enough to service the promised returns for existing investors. It was named after Charles Ponzi even though the scheme had been around even before he started using it.

Speak Asia claimed to pay people for taking online surveys on a variety of topics. The surveys were apparently commissioned by different companies around the world to understand consumer behavior and preferences. In 2011-12, the government began probing into the activities of the company, which was based out of Singapore. The discovery of the scam led to the company's top management being arrested and several accounts of the company were frozen by Indian banks.
7. Which global sports apparel giant filed a case against its Indian subsidiary's senior management team in 2012 citing fraud?

Answer: Reebok

Though Reebok was bought over by Adidas in 2005, the Indian operations of the two companies continued to function separately till 2011. In 2011, the Managing Director of Reebok India was made the head of the merged identity. In March 2012, the parent company Adidas filed a case against the MD and the Chief Operating Officer of the company accusing them of having committed fraud. According to the complaint filed by Adidas, the Indian subsidiary had set up warehouses of its own without disclosing these to the parent company. Goods were stocked in these warehouses to inflate the sales figures. Apart from this, the company also alleged that the accounts had been fudged.
8. This Indian company was one of the early movers in the manufacturing of recordable compact discs and enjoyed a dream run in its initial phases. Unfortunately, the technology was soon developed by other competitors and the company was unable to match the low cost products manufactured in countries like China. With the prices of compact discs crashing, which of the following companies found itself struggling to manage its operations?

Answer: Moser Baer

At its peak, Moser Baer found itself unable to meet the huge demand its products commanded. Unfortunately, the company made huge investments in capacity expansion at the same time that low cost compact discs began to be manufactured in locations in China and Taiwan. With the prices of the product falling sharply, the company was unable to recover the money it had invested in the new manufacturing facilities. Soon the demand for compact discs itself started declining with newer products like USBs and flash drives taking its place.
9. South Indian media company Deccan Chronicles was well established with its English language newspaper having significant circulation numbers. However, the promoters' decision to sponsor a sports team didn't end up being too well thought out. In which popular Indian sport did the company purchase a franchisee?

Answer: Cricket

The Indian Premier League (IPL) for Twenty20 cricket was formed in 2007. Of the eight initial teams in the League, Deccan Chronicles bought the franchisee for the Hyderabad team which was then named the Deccan Chargers. While all the IPL teams struggled to break even, it later emerged that Deccan Chronicles had taken on too much debt to support the cricket franchisee, among its other business diversifications. By June 2012, some of the lenders began to file suits against the company for recovery of their dues.

The IPL team players had not been paid for several months and the company was also sued by its former chief executive Timothy Wright seeking the money due to him. Finally in October 2012, the Board of Control for Cricket in India (BCCI) terminated the Deccan Chargers franchisee.
10. Which private Indian airlines, promoted by liquor baron Vijay Mallya, had to have its debt restructured by lenders in 2010 due to continued losses?

Answer: Kingfisher Airlines

Kingfisher Airlines was launched by the United Breweries group in 2005. While the airlines was yet to post profits, the management decided to go ahead and buy another low cost carrier called Air Deccan in 2007. The additional debt burden combined with the slowdown in the aviation sector following the global recession in 2008 served to increase the losses of the airline.

The company struggled to break even and eventually lenders were forced to restructure debt of almost $1.5 billion in 2010.
Source: Author zorba_scank

This quiz was reviewed by FunTrivia editor stedman before going online.
Any errors found in FunTrivia content are routinely corrected through our feedback system.
Related Quizzes
This quiz is part of series Incredible India:

Explore this fascinating country through quizzes in categories ranging from Geography and World to Sci-Tech and Religion and everything in between.

  1. Renamed in India Average
  2. Enduring Wonders of India Average
  3. Authors from India and of Indian Origin Average
  4. It's a Girl! Average
  5. Colours in Hindi Easier
  6. Endless Night: Union Carbide Tragedy Average
  7. An Introduction to Sikhism Average
  8. Love, Duplicately Average
  9. Born in Bombay Easier
  10. Olympics - The Indian Journey Average
  11. Indian Sweets Average
  12. I Got These Words from India Average

3/28/2024, Copyright 2024 FunTrivia, Inc. - Report an Error / Contact Us