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Ramalinga Raju

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Ramalinga Raju
Born (1954-09-16) September 16, 1954 (age 70)
Bhimavaram, Andhra Pradesh, India
NationalityIndian
Occupationformer Chairman of Satyam Computer Services
SpouseNandhini

Ramalinga Raju is a former Indian IT Industrialist, who founded Satyam Computers in 1987 and chaired till January 7, 2009, when he announced his exit after admitting to orchestrating massive accounting fraud within the company.[1]

Early life

Ramalinga Raju was born on September 16, 1954 in a family of farmers. He did his B. Com from Andhra Loyola College at Vijayawada and subsequently did his MBA from Ohio University, USA. He was enrolled in the Executive Owner/President Management Program (OPM) at Harvard Business School.[2]

After returning to India in 1977, Ramalinga Raju moved away from the traditional agriculture business and set up a spinning and weaving mill named Sri Satyam. . Thereafter he shifted to the real estate business and started a construction company called Satyam Constructions. In 1987, Ramalinga Raju founded Satyam Computer Services along with one of his brothers-in-law, DVS Raju. The company went public in 1992. With the launch of Satyam Infoway (Sify) Satyam became one of the first to enter Indian internet service market.[3] Sify was later sold to Mr. Raju Vegesna.

Accounting scandal

Ramalinga Raju resigned from the Satyam board after admitting to falsfiying revenues, margins and over Rs 50 billion of cash balances as the company.

A botched acquisition attempt involving Maytas in December 2008 led to a plunge in the share price of Satyam.[4] In January 2009, Raju indicated that Satyam's accounts had been falsified over a number of years.[4] He admitted to an accounting dupery to the tune of 7000 crore rupees or 1.5 Billion US Dollars and resigned from the Satyam board on January 7, 2009.[5][6] In his letter of resignation, Raju described how an initial cover-up for a poor quarterly performance escalated: "It was like riding a tiger, not knowing how to get off without being eaten."[7]

Raju and his brother, B Rama Raju, were then arrested by the CID Andhra Pradesh police headed by Mr. V S K Kaumudi, IPS on charges of breach of trust, conspiracy, cheating, falsification of records. Raju may face life imprisonment if convicted of misleading investors.[8] Raju had also used dummy accounts to trade in Satyam's shares, violating the insider trading norm.[9]

It has now been alleged that these accounts may have been the means of siphoning off the missing funds.[10] Raju has admitted to overstating the company's cash reserves by USD$ 1.5 billion.[10][11] Raju was hospitalized in September 2009 following a minor heart attack and underwent angioplasty. Raju was granted bail on condition that he should report to the local police station once a day and that he shouldn't attempt to tamper with the current evidence. This bail was revoked on 26 October 2010 by the Supreme Court of India and he has been ordered to surrender by 8 November 2010.[12] The people of his native village, Garagaparru, hail the development works undertaken by the Byrraju Foundation, the charitable arm of Satyam.[13] Ramalinga Raju was Granted a bail by the supreme court on 4 November 2011 after the Central Bureau of Investigation failed to chargesheet Raju within the statutory period.[14]

Supreme court verdict

The Supreme Court on November 4, 2011 granted bail to Ramalinga Raju, founder and former chairman of outsourcing firm Satyam Computer Services Ltd, in a $1.5 billion financial fraud case, after the Central Bureau of Investigation (CBI) failed to file charges on time.

The CBI did not file a charge-sheet against Raju within the statutory period, according to a court order seen by Reuters.

According to Indian law, charge-sheet against an accused has to be filed within 90 days of arrest.

Raju, a management graduate from Ohio University who founded Satyam in 1987, shocked investors in January 2009 when he said the firm's profits had been overstated for years and assets falsified in a fraud allegedly worth more than $1.5 billion.

In November 2010, he surrendered after the Supreme Court in August cancelled a bail granted to him by a lower court in Hyderabad, where Satyam is based.

In an auction in April last year, Satyam was sold to Indian IT firm Tech Mahindra, majority-owned by automaker Mahindra & Mahindra and part-owned by British telecoms firm BT Plc.

It was subsequently renamed Mahindra Satyam.In 2013 Aug Mahindra satyam has became part of Tech Mahindra officially.[15]

References

  1. ^ http://timesofindia.indiatimes.com/business/india-business/Satyams-chairman-Ramalinga-Raju-resigns-admits-fraud/articleshow/3946088.cms
  2. ^ Matthew Fox. "Satyam's Aversion to Imitation Fuels Growth" (PDF). Rotman Magazine (Winter 2005): 68. Retrieved 2012-12-22.
  3. ^ http://wisdomtalks.com/ramalinga-raju-satyam-full-details-start-success-and-fall-down/
  4. ^ a b Joe Leahy (08-01-2009). "The $1bn black hole at the heart of company's finances". Financial Times. {{cite journal}}: Check date values in: |date= (help)
  5. ^ Blakely, Rhys (8 January 2009). "B. Ramalinga Raju, chairman of Satyam, admits £1bn fraud and quits". The Times (London). News International Limited. Retrieved 2009-01-08.
  6. ^ "Mr Raju's resignation letter" (PDF). BBC News. BBC. 7 January 2009. Retrieved 2009-01-08.
  7. ^ "Satyam stunner: Highs and lows of Raju's career". Reuters. CNN-IBN. January 7, 2009. Retrieved 2009-01-07.
  8. ^ Blakely, Rhys (January 10, 2009). "Raju brothers charged with forgery in $1bn Satyam case". The Times (London). News International Limited. Retrieved 2009-01-10.
  9. ^ "Raju had opened multiple benami accounts: I-T probe". NDTV. NDTV. Retrieved 2009-01-15.
  10. ^ a b "Indian Executive Is Said to Have Siphoned Cash, New York Times, January 17, 2009
  11. ^ "Indian IT scandal boss arrested". BBC News. BBC. 9 January 2009. Retrieved 2009-01-10.
  12. ^ "Satyam boss Raju's bail cancelled". BBC News. 26 October 2010.
  13. ^ "Ramalinga Raju's village still blesses him". Indianexpress.com. 2009-01-09. Retrieved 2011-04-13.
  14. ^ "Supreme Court grants bail to Satyam founder Raju". in.reuters.com. 2011-11-04. Retrieved 2011-11-04.
  15. ^ "Supreme Court grants bail to Satyam founder Raju". Reuters. 2011-11-04.

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