AFP: An Indian court yesterday convicted the former chief of outsourcing giant Satyam and his aides over a $2.25 billion accounting fraud scandal dubbed “India’s Enron”, the prosecutor said.
Byrraju Ramalinga Raju, his brother and eight others were found guilty of manipulating Satyam’s books in 2009 during the IT boom in India in a case that shook the industry and raised questions about the country’s regulators.
“All the accused have been convicted of almost all charges,” prosecutor K. Surender told reporters outside the court in Hyderabad, capital of southern Andhra Pradesh state.
Raju was charged with criminal conspiracy, cheating and breaching public trust in a fraud that prosecutors told the court caused 140 billion rupees ($2.25 billion) in losses to shareholders.
He faces prison for breach of trust following the years-long case and a trial in which prosecutors produced thousands of pages of financial documents and 200 witnesses.
The Satyam scandal erupted in 2009 after Raju admitted in a letter to shareholders to overstating profits for years and inflating the company’s balance sheet, a confession that saw the company’s share price plummet.
Tech Mahindra, a unit of Indian vehicle and farm equipment manufacturer Mahindra and Mahindra, bought Hyderabad-based Satyam in April 2009, saving it from collapse.
Raju, who was educated in India and the United States, was one of the stars of India’s software boom - a key driver of the country’s economic growth over the previous decade.
“The concern was that poor performance would result in a takeover,” he said in his letter to shareholders.
“It was like riding a tiger, not knowing how to get off without being eaten.”