Byrraju Ramalinga Raju, the former chief of outsourcing giant Satyam Computer Services, who overstated his company's assets by Rs 5,040 crore and shocked India Inc in January 2009, is back in jail.
The special court in Hyderabad, popularly known as Satyam court, on Thursday sentenced him and eight others, including former chief financial officer Vadlamani Srinivas, former PricewaterhouseCoopers auditors Subramani Gopalakrishnan and T Srinivas, to seven years' rigorous imprisonment.
The lean, tall guy, now a fallen star of IT industry, publicly confessed to his crime on January 7, 2009, in a letter addressed to the board of directors.
It's "with deep regret and tremendous burden," Raju broke the news of overstating profits and revenues. What began as a marginal gap in the actual and inflated profits had grown manifold over the years, and then attained unmanageable proportions.
"It was like riding a tiger, not knowing how to get off without being eaten," he wrote in his confession, sharing a big lesson for several potential fraudsters of India Inc.
The country's biggest accounting fraud and the pursuant shock wave wrecked havoc on the Satyam stock, and investors ran for cover. The company, which was till then counted as the fourth-largest Indian IT firm by revenues, suddenly fell like ninepins.
Shareholders lost as much as Rs 14,000 crore in the next few days. As promoters and other fraudsters cooled their heels behind bars, Tech Mahindra, the information technology (IT) arm of Mahindra and Mahindra (M&M), bought Satyam in April 2009 in an auction, saving it from the jaws of death.
Four years after acquiring the disgraced firm, Tech Mahindra completed the merger of Satyam with itself, creating the fifth-largest IT company based in India.
"Today, we have fulfilled the commitment made in 2009, when we acquired Satyam, to jointly become one of the largest, diversified players leveraging technology for business solutions," Mahindra had proudly told local stock exchanges then.
Raju and others fought the case from the jail in the first three years, and from outside since November 2011 when he was granted bail. Interestingly, despite his confession in the court, Raju pleaded "not guilty".
Around 3,000 documents were marked and 226 witnesses examined during the trial, according to PTI. Investigations had revealed that he had acquired and promoted shell companies in the names of his kith and kin in order to strike fictitious deals with Satyam and inflate revenues/profits while some were even used to conceal the ill-gotten money.
Several IPC sections relating to criminal breach of trust, forgery of security, cheating and falsification of accounts were proved in the court.
Apart from rigorous imprisonment, Raju and his brother, Satyam's former managing director B Rama Raju, were also fined Rs 5 crore each while the other accused have been fined up to Rs 25 lakh by the court. Surely, the Raju brothers and former auditors of PwC are mulling over 'appeal' in higher courts.
Satyam may be an unpleasant memory today for thousands of its employees and shareholders. Tech Mahindra, the merged entity, has since grown well. As on Thursday, its market capitalisation was Rs 64,430 crore. Over the last few years, Hyderabad has transformed itself from a 'fraud' capital to a fast-growing IT hub that acts as the Indian headquarters of the likes of Google and Microsoft.
—With inputs from agencies
