Indian outsourcer Satyam's founder guilty of accounting fraud, court rules

B. Ramalinga Raju confessed in 2009 that the company had overstated its revenue and profit for several years

The founder of Satyam Computer Services has been found guilty of a financial scam that brought the Hyderabad-based outsourcer to the verge of collapse before its rescue by a rival.

A special court in south India found B. Ramalinga Raju and nine others, including former executives of the company, guilty of several crimes for which they will be sentenced on Friday, according to local reports. Raju and some other key accused had previously spent about a year in judicial custody.

The company went into crisis in January 2009, when Raju disclosed that the company's revenue and profit had been inflated for several years.

The Indian government replaced the existing board with its own nominees charged with steering the company through the scandal. The government thus hoped to reassure customers, but a large number drifted away all the same, analysts said at the time.

Satyam also had to settle litigation and fraud charges, including with the U.S. Securities and Exchange Commission.

In an auction in April 2009 another Indian outsourcer, Tech Mahindra, acquired a dominant stake in the company through its subsidiary Venturbay Consultants. Satyam was eventually merged with Tech Mahindra in 2013, in a quest for operational efficiency and economies of scale. The turnaround has been profitable for Tech Mahindra: In the fourth quarter last year, it had profit of $129 million on revenue of US$924 million.

Raju was one of the poster boys of the Indian IT industry before the scandal, and much of the damage control after the financial crisis was focused on ensuring that other Indian outsourcers such as Infosys and Wipro were not affected by the scandal. The other firms were, however, not impacted and may have benefited for a while from business shifting to them from Satyam.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags outsourcinglegalservicessatyam computer servicesCriminal

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Essentials

Mobile

Exec

Budget

Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?