Satyam scandal prime accused B Ramalinga Raju, once the poster boy of the ITeS industry, and his brother B Rama Raju were sentenced Thursday to seven years rigorous imprisonment and fined Rs 5.5 crore each after they were convicted by a special court in the Rs 7,800-crore accounting fraud that shook the country six years ago.
Raju’s youngest brother Suryanarayana Raju, Satyam’s chief auditor V Prabhakar Gupta, former chief financial officer Vadlamani Srinivas, former PricewaterhouseCoopers auditors S Gopalakrishna and T Srinivas, former Satyam accounts and auditors G Ramakrishna, D Venkatpathi Raju and C Srisailam, have also been sentenced to 7 years in jail. They were all fined Rs 25 lakhs each.
Special judge B V L N Chakravarthi convicted the 10 of criminal conspiracy and cheating among other offences.
All the 10 accused were present in court, where media was not allowed, when the verdict was pronounced. After the order, the judge directed the CBI to take all the accused into custody.
The court declined to entertain a plea for a lenient view on the quantum of sentence by Ramalinga Raju for his “philanthropic activities”.
“It is not a fit case either for invoking provisions of the Probation of Offenders Act or taking a lenient view on quantum of sentence,” the judge said.
In January 2009, Ramalinga Raju, then Satyam chairman, allegedly confessed to manipulating his company’s account books and inflating profits over many years.
Raju was arrested by Andhra Pradesh CID along with his brother Rama Raju and others. The main chargesheet ran into 2,315 pages and thousands of documents were attached, making it a voluminous 65,000-page case file. It alleged that the Raju brothers devised a mechanism to fudge and fake balance sheets, bank statements and records. They had involved relatives in insider trading.
The eight other accused assisted them in preparing fake invoices, bank confirmation letters and fixed deposit receipts. Besides statements of the Raju brothers and their family members, the CBI named 432 other witnesses but only 232 were examined by the court, mainly Satyam management officials and auditors.
Raju founded Satyam Computer Services in 1987 and built it into a top ITeS firm. But he began to assemble a parallel empire in which dozens of benami companies, fictitious salary accounts were opened in the names of nearly 13,000 non-existent employees. He allegedly set up a well-oiled machinery to forge bank and NBFC statements and certificates, and floated fictitious real estate fronts to purchase land.
By calling for random recruitment from campuses in which thousands were offered jobs, Raju allegedly inflated the company’s staff strength to 53,000 employees when it was only 40,000. Those candidates who were picked up during campus placement were never given appointment letters. But fictitious salary accounts for them were opened.
Raju allegedly confessed to having made at least 400 benami transactions to buy land in several parts of Andhra Pradesh. The Raju family acquired land in Ranga Reddy, Nalgonda and Hyderabad.
Satyam was purchased by Tech Mahindra in April 2009.