Date
23 January 2017
Ramalinga Raju (center) confessed he had falsified records for years to inflate Satyam’s earnings. Photo: WSJ
Ramalinga Raju (center) confessed he had falsified records for years to inflate Satyam’s earnings. Photo: WSJ

Satyam founder jailed 7 years for fraud

An Indian court has sentenced the founder of outsourcing company Satyam Computer Services Ltd. to seven years in prison after finding him guilty of fraud, The Wall Street Journal reported.

The US$1 billion accounting scandal, which surfaced six years ago, destroyed his company. 

In early 2009, Satyam chairman Ramalinga Raju wrote a letter to the Securities and Exchange Board of India and shareholders, confessing that he had falsified records for years to inflate the company’s earnings.

Raju resigned from the firm the day he submitted the letter.

A court in Hyderabad, where the now-defunct Satyam was based, found Raju, his brother Rama Raju and eight others guilty of cheating, misappropriation of funds and falsification of accounts, among other charges.

All were sentenced to seven-year prison terms.

Ramalinga Raju was fined more than 50 million rupees, or about US$800,000. The other defendants were fined five million rupees each.

The judge, B.V.L.N. Chakravarthi, wrote that he couldn’t be lenient in sentencing, because the actions of those convicted were “grave offenses affecting the reputation of the corporate system of the country as a whole and the economy”.

Ramalinga Raju’s lawyer said he would file an appeal.

Among those found guilty were two auditors from the Indian arm of global accounting firm PricewaterhouseCoopers. They also plan to appeal.

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