NewsIndiaTimes - page 4

News India Times
April 17, 2015
4
Cover Story
By Amrita Jayakumar
he founder of Satyam
Computer Services,
once India’s fourth-
largest software servic-
es firm, was sentenced
to seven years in
prison after being found guilty in
an accounting fraud case that
ranks as the country’s biggest.
A court in Hyderabad, where
Satyamwas based, on April 9
pronounced Ramalinga Raju, a
management graduate from
Ohio University who founded
Satyam in 1987, guilty of forging
documents and falsifying
accounts.
Raju admitted in January
2009 in a five-page letter that
Satyam’s profits had been over-
stated for years and assets falsi-
fied in a fraud allegedly worth
over $1.5 billion, bringing the
company to the brink of col-
lapse.
Satyam, which in Sanskrit
means “truth,” was sold the
same year to the smaller rival
Tech Mahindra Ltd (TEML.NS)
in an auction. The company was
later merged with Tech
Mahindra, a unit of conglomer-
ate Mahindra &Mahindra Ltd
(MAHM.NS).
The Hyderabad court also
found Raju’s brother and ex-
Satyammanaging director, B.
Rama Raju, as well as eight oth-
ers guilty and sentenced them to
seven years in prison, special
public prosecutor K. Surender
said. “The judgment given by the
court will have far reaching con-
sequences in checking corporate
frauds and shall also act as a
severe deterrent,” said Rajesh
Narain Gupta, managing partner
at law firm SNG & Partners.
All the accused in the case
were charged with collaborating
to inflate the company’s rev-
enue, falsifying accounts and
income tax returns and fabricat-
ing invoices among other things,
the prosecutor said.
Raju and his brother were
also fined by the court 55 million
rupees ($883,960) each.
Uma Maheshwar Rao, a
lawyer for Raju, told Reuters that
the Satyam founder would chal-
lenge the verdict in a higher
court. He did not give details.
Some local media reported that
an appeal could be filed as soon
as April 13.
Softly spoken Raju, born into
a family of farmers, was a poster
boy of Indian entrepreneurship
after setting Satyam on a path of
high growth, hiring thousands of
staff and bagging lucrative out-
sourcing contracts from overseas
clients.
“It was like riding a tiger, not
knowing how to get off without
being eaten,” he had written in
his resignation letter in 2009,
detailing years of financial
deception at the firm.
Satyam rose to prominence in
the late 1990s when Raju was
among the first to spot outsourc-
ing opportunities in the year
2000 rollover problem, which
saw the coming of age of the
software outsourcing industry.
The company, which was list-
ed in NewYork as well as on the
Indian stock markets, special-
ized in business software and
back-office services for clients in
the United States and Europe.
– Reuters
IANS
– that’s all you need to know
T
A Moment of Satyam
India’s Computer Services Pioneer
B. RamalingaRaju Sentenced to
SevenYears inPrison
The prime accused in the multi-crore Satyam scam B. Ramalinga Raju arrives to appear before a special CBI court in Hyderabad, on April 9.
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