Satyam Computer Services CEO B Ramalinga Raju and his brother B Rama Raju were arrested today and sentenced to 7 years rigorous imprisonment and Cout fined Rs 5.5 crore after they were convicted by a special court in the Rs 7,000-crore accounting fraud that shook the corporate world six years ago.Eight others, including former Chief Financial Officer Vadlamani Srinivas, former Price Waterhouse auditors Subramani Gopalakrishnan and T Srinivas, were also sentenced to seven years rigorous imprisonment and fined varying amounts up to Rs 25 lakh by Special Judge B V L N Chakravarthi,
Except Raju’s another brother B Suryanarayana Raju and former internal chief auditor V S Prabhakar Gupta, all the others eight accused were found guilty under IPC sections 467, 468, 471 and 477A, relating to forgery of security, forgery for purpose of cheating and falsification of accounts, according to V Chandrashekhar, Superintendent of Police, CBI Hyderabad Zone.
While the accounting fraud was to the tune of Rs 7,000 crore, it had caused an estimated notional loss of Rs 14,000 crore to investors and unlawful gains of Rs 1900 crore to Raju and others.
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.
Besides Ramalinga Raju, the others accused are – B Rama Raju, former Chief Financial Officer Vadlamani Srinivas, former PwC auditors Subramani Gopalakrishnan and T Srinivas, Suryanarayana Raju, former employees G Ramakrishna, D Venkatpathi Raju and Ch Srisailam and Satyam’s former internal chief auditor V S Prabhakar Gupta.Satyam was purchased by Mahindra & Mahindra owned company Tech Mahindra in April, 2009.