BANGALORE, India—He was cooking the company books with a generous dash of lies, and the figures looked and smelt very attractive. The portion of lies, however, was getting larger and larger every year. It went on for seven years, garnering several awards for the cook and company along the way.
The lies, however, became too ‘fat’ to hide at the end of the third quarter of the seventh year. The monster of untruth had turned into a one billion dollar fraud—the first mega-scam of India’s IT space, with global impact to boot. Left with no choice, the cook, B Ramalinga Raju, who happened to be the CEO and co-founding chairman of Satyam Computers Services Ltd, decided to tell the truth—or rather, the untruth.
On Jan. 7, 2009, he sent an e-mail to board members and colleagues, explaining that the assets were hugely inflated, while liabilities were underrated. The letter was made public, sending shockwaves through the investor community, while others, including government officials, found themselves in utter shock.
After two weeks of Raju’s infamous confession, it has been established that Raju did a lot more than just cook the books. Investigative agencies are unraveling the truth in bits and pieces, which show fraud committed by Raju and his family on an unimaginable scale. One piece of evidence says the family siphoned off company money to the tune of over US$ 670 million, and bought thousands of acres of land all over the country and beyond. Another piece says there were only 40,000 employees in the company, and not 53,000, as written in the books.
Satyam Computers Services Ltd is the fourth largest IT services provider in India. Armed with an MBA from Ohio University, Raju co-founded the company 21 years ago. With the help of an abundant state patronage, his empire expanded into eight companies, including some in real estate and infrastructure, registered in his sons’ names.
Headquartered in India’s southern city of Hyderabad, Satyam operates in more than 65 countries, including the US, the UK, Middle Eastern countries, Japan, Singapore and Australia. The company does business with about 700 global clients, including Fortune 500 companies such as Nestle, General Electric, and Ford Motors.
Lies aside, Ramalinga Raju picked up several awards along his “spectacular” journey, including: the 2008 Golden Peacock Global Award for Excellence in Corporate Governance by the World Council for Corporate Governance of the UK, and Asia Business Leader Entrepreneur of the Year Award, 2007, by Ernst & Young.
Ironically, Satyam’s internal audit team, which apparently did not do a good job over the years, was awarded a Recognition of Commitment award by the Institute of Internal Auditors from the US, in 2006.
In another stroke of irony, “Satyam” means “truth” in Sanskrit—though Raju didn’t consider himself beholden to live up to his company’s name.
Ramalinga Raju was of the ten richest men in Indian a few days ago, with a $1.3 billion fortune. He now shares a prison cell with 40 other inmates, beginning two days after he wrote the fateful e-mail.
The lies, however, became too ‘fat’ to hide at the end of the third quarter of the seventh year. The monster of untruth had turned into a one billion dollar fraud—the first mega-scam of India’s IT space, with global impact to boot. Left with no choice, the cook, B Ramalinga Raju, who happened to be the CEO and co-founding chairman of Satyam Computers Services Ltd, decided to tell the truth—or rather, the untruth.
On Jan. 7, 2009, he sent an e-mail to board members and colleagues, explaining that the assets were hugely inflated, while liabilities were underrated. The letter was made public, sending shockwaves through the investor community, while others, including government officials, found themselves in utter shock.
After two weeks of Raju’s infamous confession, it has been established that Raju did a lot more than just cook the books. Investigative agencies are unraveling the truth in bits and pieces, which show fraud committed by Raju and his family on an unimaginable scale. One piece of evidence says the family siphoned off company money to the tune of over US$ 670 million, and bought thousands of acres of land all over the country and beyond. Another piece says there were only 40,000 employees in the company, and not 53,000, as written in the books.
Satyam Computers Services Ltd is the fourth largest IT services provider in India. Armed with an MBA from Ohio University, Raju co-founded the company 21 years ago. With the help of an abundant state patronage, his empire expanded into eight companies, including some in real estate and infrastructure, registered in his sons’ names.
Headquartered in India’s southern city of Hyderabad, Satyam operates in more than 65 countries, including the US, the UK, Middle Eastern countries, Japan, Singapore and Australia. The company does business with about 700 global clients, including Fortune 500 companies such as Nestle, General Electric, and Ford Motors.
Lies aside, Ramalinga Raju picked up several awards along his “spectacular” journey, including: the 2008 Golden Peacock Global Award for Excellence in Corporate Governance by the World Council for Corporate Governance of the UK, and Asia Business Leader Entrepreneur of the Year Award, 2007, by Ernst & Young.
Ironically, Satyam’s internal audit team, which apparently did not do a good job over the years, was awarded a Recognition of Commitment award by the Institute of Internal Auditors from the US, in 2006.
In another stroke of irony, “Satyam” means “truth” in Sanskrit—though Raju didn’t consider himself beholden to live up to his company’s name.
Ramalinga Raju was of the ten richest men in Indian a few days ago, with a $1.3 billion fortune. He now shares a prison cell with 40 other inmates, beginning two days after he wrote the fateful e-mail.
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