Rise and fall of Satyam founder Ramalinga Raju

Suresh Dharur

Tribune News Service

Hyderabad, April 10

From being an IT icon to a wily manipulator and a convict, the downfall has been swift and shocking for the founder-chairman of Satyam Computers B Ramalinga Raju.

The life journey of 61-year-old Raju, who has been sentenced to 7-year imprisonment in the biggest corporate fraud case, has been a roller coaster ride and what finally did him in was greed and unrealistic ambition.

From a humble beginning in Bhimavaram, a small coastal Andhra town, Raju went on to become the poster boy of software industry, guiding the destiny of India’s fourth largest IT company and helping Hyderabad catapult into the international IT map.

Not long ago, Satyam Computers was a household name in the combined state of Andhra Pradesh and a dream destination of every engineering student. Starting the company from small premises in Secunderabad in 1987, Raju built an IT empire that served as a role model for many in the industry.

With a soft-spoken and humble appearance, Raju earned many laurels and was the toast of the booming IT industry. India Inc had bestowed on him several prestigious awards for corporate governance, including the Golden Peacock Global award for Excellence in Corporate Governance in 2008, just a year before his sensational statement confessing to the accounting fraud.

A commerce graduate from Andhra Lyola College in Vijayawada, Raju rubbed shoulders with the high and mighty in the IT world globally and the highpoint of his career was when he shared the dais with the then US President Bill Clinton and made a presentation about his professional journey and his vision for the future.

Riding on the crest of outsourcing boom, Satyam Computers rose from a humble beginning in 1987 with 23 employees to become a leading global player with 53,000-strong staff spread over 66 countries and having 185 Fortune 500 companies as its customers. The company was listed on New York Stock Exchange in 2001.

All that changed on January 7, 2009. The chilling revelation by the IT icon, in his confessional letter to the SEBI, that he had fudged books and inflated profits shook the corporate world. With this, his image as one of the pioneers of IT revolution nosedived and he became persona non grata overnight.

A commerce graduate from Lyola College, Vijayawada, Raju had pursued MBA from Ohio University in the US before returning to India to start business. After trying his hand at textile and construction business, he saw potential in the emerging software industry and founded Satyam Computers in 1987.

Though fudging of accounts was going on for several years, the crisis in the IT company erupted into the open following Raju’s decision to acquire Maytas Infra and Maytas Properties, real estate firms owned by his family members, at a cost of $1.6 billion. It was widely seen as an attempt to benefit the family members of Raju at the cost of Satyam’s shareholders.

Following angry reaction from shareholders, the company backtracked on the proposal but not before suffering a dent in its international image. This was followed by resignation of four independent directors from the company and the final nail came with Raju himself confessing to the fraud.