Satyam’s Ramalinga Raju: Conman in Gentleman’s Clothes?

Ramalinga Raju, who led the outsourcing industry to great heights of success, was born and brought up in South India and pursued his MBA from, USA,. Ohio University which is known for developing entrepreneurs worldwide.

He also obtained a degree from Harvard Business School and after coming back to India; he felt the growth potential in outsourcing industry which led to Satyam Computers in 1987. He worked very hard to get orders from American Companies.

As the brand image of Satyam Computers developed in outsourcing industry, there was no looking back. Satyam Computers’ growth and profits increased year on year and there was only one mind who led such a big company to great heights. Ramamlinga Raju was known for his visionary thoughts and new ideas. Satyam’s examples were given for performing best practices and won a number of awards for corporate governance.

Even Raju spent a lot of money for benevolent purposes for his villages and he was not less than savior for them. Raju became role model for B-school aspirants as well as a demigod for villagers. The image of Raju was not less than a Gentleman, a visionary, an entrepreneur, a savior, what do you think?

Satyam Computers was has more than 50,000 employees and was a pioneer in outsourcing industry. It was the aim of people to either work for Satyam Computers or in any other way, get associated with Satyam Computers. People were ready to invest money in Satyam with closed eyes because of faith and trust developed by Satyam over years in minds of the people.

But who knew that the fundamental which was shown to everyone was wrongly manipulated and not realistic? The balance sheets were inflated with high profits and sales to show consistency of Satyam as well as to deceive investors. The auditing was done by PriceWaterhouseCoopers so that no one can raise questions as such. Then how the entire scam was disclosed – a big question for all?

In October 2008, Raju told PTI that Satyam had a cash pile of Rs 4,000 crore (Rs. 40 billion) and could leverage it to muster another Rs. 15,000-20,000 crore (Rs. 150 to Rs. 200 billion) to aggressively pursue acquisitions – his cherubic innocence hiding the mess his company was in.

The entrepreneur iconic image was questioned when it made acquisition of his son company Maytas Infra for 1.6 billion US dollars. Investors’ dissent forced him to go back on the deal and then there was no way forward or sideways — so he called quits. This point was crucial for Raju which made him to disclose what he was hiding for years?

Finally he wrote a letter to Board of Directors disclosing fraud of 7000 crore (950 million pounds) made by him along with other major financial manipulations. “It was like riding a tiger, not knowing how to get off without being eaten,” Raju said in the same letter. Who knows that such an innocent gentleman face was overlapping the conman whose evil thoughts remains undisclosed?

It took the man over two decades to become the poster boy of India’s Information Technology industry and less than two weeks to turn into the rogue who personifies all that is defective with the country’s outsourcing industry. The scam is disclosed, when India is facing great slowdown and questions were raised on banning outsourcing services by USA – might make the condition worst.

Satyam scandal – India’s biggest corporate scam, has raised questions for other corporations which led the investors in ambiguity as well as doubts on the way in which business is carried out in India.

Akash Singhvi

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