Satyam scam: 7-year jail term for Ramalinga Raju

The company's co-founder was found guilty of cheating, forgery and criminal breach of trust

Ramalinga Raju was his usual self, calm and unperturbed, even as the final verdict of seven years of rigorous imprisonment was being announced by a special court set up by the Central Bureau of Investigation (CBI) for his role in the multi-crore accounting fraud at the erstwhile Satyam Computer Services.

It was as if Raju, former chairman of Satyam, was aware ‘the tiger’ he had been ‘riding’ for several years was now about to throw him off its back and prey on him.

Apart from him, the court awarded seven years of rigorous imprisonment to his brother and former managing director B Rama Raju and to eight others, including another brother, B Suryanarayana Raju, former chief financial officer Srinivas Vadlamani and former Price Waterhouse auditors S Gopalakrishnan and Srinivas Talluri.

“The additional chief metropolitan magistrate, B V L N Chakravarthi, found all the 10 accused guilty. He also fined Raju and his brother Rs 5 crore each, and eight others Rs 25 lakh each,” said V Chandrasekhar, superintendent of police, CBI.

 

Following the verdict, all the convicted were taken into custody and shifted to Cherlapally Central Jail in Secunderabad.

After the magistrate pronounced the 977-page judgment, Ramalinga Raju and Rama Raju stated their philanthropic activity had benefited hundreds of thousands of people and sought lenient sentencing.

The court rejected their appeals and Ramalinga Raju’s request for special prisoner status.

Price Waterhouse issued a statement in Bengaluru, saying it was disappointed with the verdict and its former partners Gopalakrishnan and Talluri were considering filing an appeal against the verdict.

The corridor on the second floor and the Nampally court precinct were packed to capacity with journalists from various national media houses, making circles around the counsels of both parties, walking briskly to and from the court hall. While wire journalists were busy typing liners, their print media counterparts were seen filing stories from their mobiles for online editions.

Excluding B Suryanarayana Raju and V S P Gupta, former internal chief auditor, the other eight accused were found guilty of forgery and falsification of accounts. Ramalinga Raju and Rama Raju were also found guilty of criminal breach of trust.

A CBI official said the agency would appeal, seeking a stiffer sentence. “We are going to approach a sessions court against the verdict,” K Ravinder Reddy, the Rajus’ advocate, told Business Standard.

The trial of the biggest accounting fraud in India began on November 8, 2010, and was completed on June 24, 2014. On March 9 this year, the judge had said he would announce his verdict on April 9.

HOW IT UNFOLDED

• 2009 Jan 7: Satyam Chairman B Ramalinga Raju confesses to accounting fraud by inflating revenues and profits for years
• Jan 10: Raju and his brother and Satyam MD Rama Raju sent to judicial custody. The CID also arrests ex-CFO Srinivas Vadlamani
• Jan 24: CBI arrests Price Waterhouse auditors S Gopalakrishnan and Srinivas Talluri
• April 6: ED registers a case against Satyam and Raju
• 2011 November 4: Supreme Court grants bail to Raju
• 2013 June 25: Tech Mahindra announces merger with Satyam
• 2014 June 24: Trial in the case against Satyam ends
• July 15: Sebi bars Raju, 4 others from accessing securities market; orders them to pay Rs 1,849 crore with 12% interest in 45 days
• Dec 9: EOW court sentences Raju, 3 others to 6 months’ imprisonment
• 2015 April 9: Special court convicts Raju and nine other accused

Following the verdict, all the convicted were taken into custody and shifted to Cherlapally Central Jail in Secunderabad.

After the magistrate pronounced the 977-page judgment, Ramalinga Raju and Rama Raju stated their philanthropic activity had benefited hundreds of thousands of people and sought lenient sentencing.

The court rejected their appeals and Ramalinga Raju’s request for special prisoner status.

Price Waterhouse issued a statement in Bengaluru, saying it was disappointed with the verdict and its former partners Gopalakrishnan and Talluri were considering filing an appeal against the verdict.

The corridor on the second floor and the Nampally court precinct were packed to capacity with journalists from various national media houses, making circles around the counsels of both parties, walking briskly to and from the court hall. While wire journalists were busy typing liners, their print media counterparts were seen filing stories from their mobiles for online editions.

Excluding B Suryanarayana Raju and V S P Gupta, former internal chief auditor, the other eight accused were found guilty of forgery and falsification of accounts. Ramalinga Raju and Rama Raju were also found guilty of criminal breach of trust.

A CBI official said the agency would appeal, seeking a stiffer sentence. “We are going to approach a sessions court against the verdict,” K Ravinder Reddy, the Rajus’ advocate, told Business Standard.

The trial of the biggest accounting fraud in India began on November 8, 2010, and was completed on June 24, 2014. On March 9 this year, the judge had said he would announce his verdict on April 9.

“The fraud was perpetrated by inflating the revenue of the company through false sales invoices and showing corresponding gains by forging bank statements with the connivance of statutory and internal auditors. The annual financial statements of the company, with inflated revenue, were published for several years and this lead to a higher price of the scrip in the market. In the process, innocent investors were lured to invest in the company. Attempts were made to conceal the fraud by acquiring the companies of kith and kin,” the CBI said.

Currently, all the accused are out on bail. Raju, the prime accused, B Rama Raju and Srinivas Vadlamani were released on bail on October 18, 2012.

Satyam case timeline