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!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags Criminalsatyam computer servicesservicesoutsourcinglegal

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

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?