Six years after the ₹7,123-crore Satyam Computer Services financial fraud rocked the nation, founder B Ramalinga Raju and his brother Rama Raju (former Managing Director) have been sentenced to seven years’ jail and fined ₹5 crore each.
The special court trying the case imposed a similar sentence on eight others charged by the Central Bureau of Investigation for a number of criminal offences, including criminal breach of trust, fudging, forgery, cheating, impersonation and destruction of evidence.
The eight are Vadlamani Srinivas (former CFO), S Gopalakrishnan (Pricewaterhouse Partner), Talluri Srinivas (Pricewaterhouse Partner), B Suryanarayana Raju, G Ramakrishna, G Venkatapathi Raju, Ch Srisailam and VSP Gupta (all former Satyam staff).
Following the judgment, all the 10 convicts were shifted to the high-security prison at Cherlapally, outside Hyderabad.
A source close to Ramalinga Raju said that they would challenge the judgment in a higher court (a Sessions Court).
“We are in the process of studying the voluminous judgment. We will take a decision after that,” the source said.
Additional Chief Metropolitan Judge BVLN Chakravarthi delivered the judgment here on Thursday, completing the five-year trial in the special court. The court was formed by the Andhra Pradesh High Court and entrusted with all the cases related to the scam.
The media was not allowed inside the court hall. A defence lawyer said that Raju pleaded with the court to consider his age, health and the social service he had carried out, while awarding the sentence.
The Raju brothers have already served 31 months in jail under judicial custody.
( Click here to read the court document on Satyam case verdict )
In 2014, capital market regulator Securities and Exchange Board of India had imposed a fine of ₹1,850 crore on the Rajus for making unlawful gains and barred them from entering the financial market for 14 years.
A local court’s Economic Offences Wing also fined them ₹10 lakh and sentenced them to a jail term of six months for financial irregularities.
Eventually, the biggest corporate fraud in recent times forced the government and SEBI to bring in a slew of measures to improve corporate governance.
The Maytas touch The crisis struck Satyam after investors and analysts questioned a move to buy two infrastructure firms (Maytas) allegedly promoted by Raju’s kin for $1.6 billion.
Though the company withdrew the decision the same day, alarm bells were set off, forcing Raju to admit that he had fudged and inflated numbers. The Satyam founder said he inflated the numbers to be among the top four firms in the IT industry.
The Union Government came to the rescue of over 50,000 employees by scrapping the board and appointing a temporary board, drawing experts from different sectors.
The new board retained the customer base and found a suitor in Tech Mahindra, which initially renamed the company as Mahindra Satyam before absorbing it into itself.