Satyam verdict: Raju gets 7 years in jail, slapped Rs 5 cr fine for corporate fraud
By ET Bureau | 10 Apr, 2015, 12.39AM IST
HYDERABAD | MUMBAI | BENGALURU: B Ramalinga Raju has been found guilty of embezzling from the IT company he founded in a verdict that was widely expected, bringing to a close the trial in India's most high-profile case of corporate fraud. Raju, 60, the founder of the erstwhile Satyam Computer Services, was sentenced by Special CBI Court Judge BVLN Chakravarthi to seven years in jail and fined Rs 5 crore for his part in falsifying the firm's books to the tune of Rs 7,136 crore.
His brother Rama Raju received identical punishment while eight others — his relatives, employees and executives of audit firm PriceWaterhouse — were each given jail terms of 7 years and asked to pay Rs 25 lakh as fine.
"It is a great lesson to fledgling entrepreneurs that there are no shortcuts to success. While you need to be ambitious and aggressive in growing your business, you have to do it with utmost respect for the laws of land," said Krishankumar Natarajan, the CEO of Mindtree and a former chairman of software industry grouping Nasscom.
Raju confessed to the fraud in January 2009 after a failed attempt to reverse-merge Satyam — then believed to be India's fourth-largest IT firm with 50,000 employees — with his privately owned realty and infrastructure businesses. Worried the scandal could damage India's reputation and cause the loss of thousands of jobs, the government stepped in to supersede the board and arranged the sale of Satyam to the Mahindra Group in an auction.
Read more at:http://economictimes.indiatimes.com/articleshow/46859938.cms?
HYDERABAD | MUMBAI | BENGALURU: B Ramalinga Raju has been found guilty of embezzling from the IT company he founded in a verdict that was widely expected, bringing to a close the trial in India's most high-profile case of corporate fraud. Raju, 60, the founder of the erstwhile Satyam Computer Services, was sentenced by Special CBI Court Judge BVLN Chakravarthi to seven years in jail and fined Rs 5 crore for his part in falsifying the firm's books to the tune of Rs 7,136 crore.
His brother Rama Raju received identical punishment while eight others — his relatives, employees and executives of audit firm PriceWaterhouse — were each given jail terms of 7 years and asked to pay Rs 25 lakh as fine.
"It is a great lesson to fledgling entrepreneurs that there are no shortcuts to success. While you need to be ambitious and aggressive in growing your business, you have to do it with utmost respect for the laws of land," said Krishankumar Natarajan, the CEO of Mindtree and a former chairman of software industry grouping Nasscom.
Raju confessed to the fraud in January 2009 after a failed attempt to reverse-merge Satyam — then believed to be India's fourth-largest IT firm with 50,000 employees — with his privately owned realty and infrastructure businesses. Worried the scandal could damage India's reputation and cause the loss of thousands of jobs, the government stepped in to supersede the board and arranged the sale of Satyam to the Mahindra Group in an auction.
Read more at:http://economictimes.indiatimes.com/articleshow/46859938.cms?
Satyam case: Ramalinga Raju, all other accused sentenced to 7 years
- Prasad Nichenametla, Hindustan Times, Hyderabad
|
- Updated: Apr 09, 2015 20:23 IST
- Prasad Nichenametla, Hindustan Times, Hyderabad |
- Updated: Apr 09, 2015 20:23 IST
Satyam founder B Ramalinga Raju was found guilty in the multi-crore accounting fraud case by a special court in Hyderabad. (AFP Photo)
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A special CBI court sentenced former Satyam chief B Ramalinga Raju and his brother on Thursday to seven years in jail and fined them Rs 5.5 crore each for forging documents and falsifying accounts in the country's biggest-ever corporate accounting fraud scandal.
Raju, once the poster boy of the IT industry, fell from grace in 2009 when he confessed to shareholders about overstating profits for years and inflating the company's balance sheet, sending shockwaves through the sector.
He has already spent 32 months in jail in connection with the scam that caused an estimated loss of Rs 14, 162 crore to investors, according to the Central Bureau of Investigation.
"I am of the opinion that a case involving economic offences, having a deep-rooted conspiracy and causing a huge loss of investor money, needs to be viewed seriously and considered as grave offences affecting the reputation of the corporate system of the country as a whole and the economy of the country. It is not a fit case for taking a lenient view on the quantum of sentence," judge B V L N Chakravarthy said, rejecting a plea of leniency because of Raju's philanthropic activities.
Apart from the former Satyam chief and his brother Rama Raju, eight others -- including former chief financial officer Srinivas Vadlamani, former PricewaterhouseCooper auditors S Gopalakrishnan and Talluri Srinivas -- were also sentenced to seven years rigorous imprisonment and fined over Rs 25 lakh each. All 10 accused in the case were convicted of criminal conspiracy, cheating and breaching public trust.
Raju's confession came as a jolt for the industry that attributed his success to dedication and hard work in Hyderabad, where joining Satyam used to be a craze among techies.
"The concern was that poor performance would result in a takeover. It was like riding a tiger, not knowing how to get off without being eaten," he wrote in his letter to shareholders on January 7, 2009.
Two days later, the board of the then fourth-largest Indian IT firm was dissolved and market regulator Sebi initiated a probe that found the company had misrepresented its accounts to its board, stock exchanges, regulators, investors and all other stakeholders. Even basic facts such as revenues, operating profits, interest liabilities and cash balances were grossly inflated to show the company in good health.
Raju was arrested the same day and sent to prison before the Supreme Court granted him bail in November 2011. Tech Mahindra bought the Hyderabad-based Satyam in April 2009, saving it from collapse.
- 85
- 39
- Share5
A special CBI court sentenced former Satyam chief B Ramalinga Raju and his brother on Thursday to seven years in jail and fined them Rs 5.5 crore each for forging documents and falsifying accounts in the country's biggest-ever corporate accounting fraud scandal.
Raju, once the poster boy of the IT industry, fell from grace in 2009 when he confessed to shareholders about overstating profits for years and inflating the company's balance sheet, sending shockwaves through the sector.
He has already spent 32 months in jail in connection with the scam that caused an estimated loss of Rs 14, 162 crore to investors, according to the Central Bureau of Investigation.
"I am of the opinion that a case involving economic offences, having a deep-rooted conspiracy and causing a huge loss of investor money, needs to be viewed seriously and considered as grave offences affecting the reputation of the corporate system of the country as a whole and the economy of the country. It is not a fit case for taking a lenient view on the quantum of sentence," judge B V L N Chakravarthy said, rejecting a plea of leniency because of Raju's philanthropic activities.
Apart from the former Satyam chief and his brother Rama Raju, eight others -- including former chief financial officer Srinivas Vadlamani, former PricewaterhouseCooper auditors S Gopalakrishnan and Talluri Srinivas -- were also sentenced to seven years rigorous imprisonment and fined over Rs 25 lakh each. All 10 accused in the case were convicted of criminal conspiracy, cheating and breaching public trust.
Raju's confession came as a jolt for the industry that attributed his success to dedication and hard work in Hyderabad, where joining Satyam used to be a craze among techies.
"The concern was that poor performance would result in a takeover. It was like riding a tiger, not knowing how to get off without being eaten," he wrote in his letter to shareholders on January 7, 2009.
Two days later, the board of the then fourth-largest Indian IT firm was dissolved and market regulator Sebi initiated a probe that found the company had misrepresented its accounts to its board, stock exchanges, regulators, investors and all other stakeholders. Even basic facts such as revenues, operating profits, interest liabilities and cash balances were grossly inflated to show the company in good health.
Raju was arrested the same day and sent to prison before the Supreme Court granted him bail in November 2011. Tech Mahindra bought the Hyderabad-based Satyam in April 2009, saving it from collapse.
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