How Satyam chief worked power levers

More than the downturn in the IT services business, it is the political nexus between the Rajus and politicians that seems to have sucked Satyam Computer Services down the tube.

Sources close to Raju told DNA that the family has always enjoyed proximity to the powers that be. It was during N Chandrababu Naidu’s time that chairman B Ramalinga Raju shot to fame as the poster boy of IT in the state. Obviously, Raju was serving the priorities of the Naidu government - information technology.

The change in dispensation after 2004 changed priorities for the Rajus, too. “The Congress government, led by YS Rajasekhara Reddy (YSR), has infrastructure and construction as its priority, and family company Maytas was ready to serve the purpose,” a senior politician in the state explained. 
                              
In the ensuing months after the Telegu Desam Party lost power in Andhra Pradesh in 2004, chairman B Ramalinga Raju shifted his focus to strengthening Maytas —the reverse of Satyam — which was created from family-owned construction company Satyam Construction. Maytas was converted into a public limited company in December, 2006, almost two years after the YSR government came to power.

“Most of us thought that the YSR government would create troubles for Raju since he was seen to be close to Naidu. Surprisingly, Raju managed to remain equally close to YSR,” a former Telugu Desam leader said.

How did he build this relationship? “Generally, corruption is seen as an offshoot of development. In this government, development is an offshoot of corruption. There is scope for anyone who can serve this purpose in the name of development,” says a disgruntled Congress leader from Telangana.

Sources at YSR’s office confirm that the Raju brothers did indeed enjoy a good equation  with the chief minister.

Maytas is a leading contractor for various irrigation projects the state government has taken up under its Jalayagnam project and the value of contracts is over Rs 10,000 crore. In addition, the government has also given it the contract to develop the port at Machilipatnam.

Though this project is estimated to cost Rs 1,200 crore, the allotment itself had become controversial with the government planning to give Rs 300 crore of cash compensation to Maytas by making some adjustments in the location of the port.

The Hyderabad Metro, the Rs 12,000-crore project, is in a controversy of its own. Delhi Metro chief E Sreedharan had raised questions on this and suspected a political scam behind awarding the project to Maytas on a reverse grant model.

“It’s a different model of corruption that’s suspected to be behind the deals with Maytas or other such companies in the state. There is no cash transaction. But, the contractor gives other tangible returns to the powers that be,” a source close to a senior bureaucrat said.

According to him, Maytas had agreed to give away about 200 acres of land to an immediate family member of a senior politician in return for some of the contracts it had won. This could not be independently ascertained by DNA.

The proximity between the Rajus and the YSR government can also be ascertained by the fact that the 108 emergency call service, which was started by Satyam on its own, has now been renamed as the Rajiv Arogyasri service and has been converted into a public private partnership project.