Satyam Computer scam: Ramalinga Raju stooped to conquer but failed

Ramalinga Raju, the former chairman of Satyam Computer Services, who in 2000 shared dais with Bill Clinton, then President of the US at the inauguration of Cyber Towers in Hyderabad, will now return to prison, where he has already spent 32 months. He has been sentenced to seven years in jail and slapped with a penalty of Rs 5 crore. The man, who carried a virtual halo around his head like a divine personality in the IT industry for two decades, would be back to barracks. Looking back, Raju firmly believed that he would still carry the glory and grandeur even 20 days before he actually gave up. When the deal to merge Maytas Infra and Maytas Properties (read the names of the companies – the mirror images of Satyam, though not a palindrome), led by his sons, Teja Raju and Rama Raju, into Satyam Computers fell through, Ramalinga Raju was a tad disappointed. [caption id=“attachment_2190895” align=“alignleft” width=“380”]  Ramalinga Raju. Reuters[/caption] But surely did not foresee, at least as far as the public knowledge goes, the doom of his future. The man, who commanded unmatched respect among his colleagues, peers and the corporate world across the globe, sounded confident when he had told this author that his company had forged “long and lasting relationships” with its customers and “we don’t believe” that the deal falling through would impact its customer sentiment or base. His claim that the recent revision of guidance (in December 2008) in terms of revenue and recruitments could not be made public owing to “silent period protocol” really portrayed a picture that Satyam had been as strong as it had always been and not tottering. Raju had said he wanted to de-risk the business model and diversify by acquiring the Maytas Infra and Maytas Properties. He, however, had miserably failed to convince the investors and analysts and the share price of Satyam Computers and Maytas Infra ebbed to their rock-bottom within a few days. He must have felt that the ground was shaky under his feet for the first time, when a demand for a change of leadership came up at an analysts call. After the “related-party transaction” fell flat on his face, Raju had apparently prepared himself and his close aides, including the nine others who were found guilty, for the darker days ahead before blowing the lid off the scandalous past of the company. Once he was sure he would soon be condemned to a déclassé corporate Czar, Ramalinga Raju stopped counting the proverbial chicks before they were hatched. For he knew that they were just shells and not eggs and could never be hatched into chicks. He stooped to conquer, but failed. His seven-page letter to the Securities and Exchange Board of India (SEBI) in the wee hours of January 7, 2009 shook the Indian corporate world. Raju had made the mother of all confessions and confirmed the defalcation of funds and also cooking the books resulting in jacking up of the share price and duping the institutional and public investors. Raju, on Thursday, pleaded with the CBI special court judge BVLN Chakravarthy to reduce the quantum of punishment, as he had already spent 33 months in the prison and undergone mental torture. He urged the judge to factor in his old parents, children’s responsibility, his social service through ISB, 108, EMRI and others before finalising the quantum of punishment. The court verdict proved Raju’s observation in the confession statement that “it was like riding a tiger, not knowing how to get off without being eaten” absolutely right. Who is Ramalinga Raju? The man who ‘gracefully’ walked out of the board room, leaving the chair to independent director Mendu Rammohan Rao, then dean of the prestigious Indian School of Business, to take forward the “related party transaction” has a humble past. He was born on September 16, 1955, to the Burraju Satyanarayana Raju couple at Garagaparru village in Bhimavaram mandal in West Godavari district of Andhra Pradesh. He studied up to III Standard at Bhimavaram, at Machilipatnam up to VI standard, in Hyderabad till IX standard and did his class X at Yendakandiga in his native West Godavari district. Raju is the alumnus of the prestigious Andhra Loyola College in Vijayawada where he pursued his Intermediate and BCom. Then he went to Ohio State University in the US for an MBA and also did executive education programmes in business administration at Harvard. Raju is the eldest of four siblings, the second being B Suryanarayana Raju and the third, B Rama Raju, who are also found guilty in the corporate fraud case. He has a younger sister A Rajeswari. Ramalinga Raju was married to Nandini in 1977 and the couple have two sons — B Teja Raju and B Rama Raju. In fact, Teja Raju floated a new company called CallHealth and commenced working on it. Ramalinga Raju’s passion has always lied in real estate and he floated two businesses - Dhanunjaya Hotels and Satyam Spinning Mills. Eventually, he opened Satyam Computer in a small house in P&T Colony in Secunderabad in 1987. Since then, there was no looking back until he made the confession statement on January 7, 2009 when his dream empire crumbled like a pack of cards.