Satyam scam: All you need to know about Ramalinga Raju and country's biggest accounting fraud

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New Delhi, April 9: Following a seven-year trial, a special court in Hyderabad convicted former chairman B Ramalinga Raju and other nine accused in the Satyam scandal.

Born in 1954, Ramalinga Raju, the former chairman of Satyam computer services (1987 to 2009) has so far spent 32 months in jail.

Satyam scam: After seven years, Ramalinga Raju, 9 others held guilty; all you need to know.
Here a few things you should know about the scam and the verdict which was given today:


The special court convicted Raju and nine others on charges of criminal conspiracy and cheating on April 9. The quantum of sentence will be pronounced on April 10, 2015.

Touted as the country's biggest accounting fraud, the scam had come to light on January 7, 2009, after Raju allegedly confessed to manipulating his company's account books and inflating profits over many years to the tune of crores of rupees.

Also read: Rewinding Satyam fraud case: Timeline

Raju was arrested by Andhra Pradesh Police's crime investigation department two days later after he allegedly confessed to the fraud, along with his brother Rama Raju and others.

From the past: 

The Satyam Computer Services scandal was a corporate scandal that occurred in 2009 where chairman Ramalinga Raju confessed that the company's accounts had been falsified.

The Global corporate community was shocked when Ramalinga Raju resigned on January 7, 2009 and confessed that he had manipulated the accounts by US$1.47-Billion.

PricewaterhouseCoopers (PwC) was the statutory auditor of Satyam Computer Services when the report of scandal in the account books of Satyam Computer Services broke.

Also read: Satyam case: When court's verdict on Ramalinga Raju reminded Twitterati of Salman Khan's driver

The Indian arm of PwC was fined $6 million by the SEC (US Securities and Exchange Commission) for not following the code of conduct and auditing standards in the performance of its duties related to the auditing of the accounts of Satyam Computer Services

In February 2009, CBI took over the investigation and filed three charge sheets (on April 7, 2009, November 24, 2009 and January 7, 2010), which were later clubbed into one.

Ramalingam Raju along with 2 other accused of the scandal, had been granted bail from Supreme court on 4 November, 2011 as the investigation agency CBI failed to file the chargesheet even after more than 33 months Raju being arrested.

Raju had appointed a task force to address the Maytas situation in the last few days before revealing the news of the accounting fraud. After the scandal broke, the then-board members elected Ram Mynampati to be Satyam's interim CEO.

The investigation: 

Around 3,000 documents were marked and 226 witnesses examined during the trial that began nearly six years ago.

In February 2009, the CBI took over the investigation and filed three charge sheets (on April 7, 2009, November 24, 2009 and January 7, 2010), which were later clubbed into one.

The first two charge sheets dealt with the account fudging by Raju with the assistance of nine others, while the third charge sheet relates to "violation" of various Income Tax rules.

While the CBI accused Raju and the others of cheating, breach of trust by way of inflating invoices and incomes in the first and third charge sheets, the second one dealt with the accused allegedly falsifying returns through violation of various IT laws.

During the trial, the CBI alleged that the scam caused a loss of Rs 14,000 crore to shareholders of Satyam, while the defence countered the charges saying the accused were not responsible for the fraud and all the documents filed by the central agency relating to the case were fabricated and not according to the law.

The accused:

Beside Ramalinga Raju, the other accused are, his brother and Satyam's former managing director B Rama Raju, former chief financial officer Vadlamani Srinivas, former PwC auditors Subramani Gopalakrishnan and T Srinivas, Raju's another brother B Suryanarayana Raju, former employees G Ramakrishna, D Venkatpathi Raju and Ch Srisailam and Satyam's former internal chief auditor V S Prabhakar Gupta.

Raju and others were charged with offences like cheating, criminal conspiracy, forgery and breach of trust under relevant sections of IPC for inflating invoices and incomes, account falsification, faking fixed deposits, besides allegedly falsifying returns through violation of various Income Tax laws.

OneIndia

(With inputs from agencies)

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