Bangalore: In a stunning five-page letter detailing years of financial deception at the

firm he founded, Satyam Computer Services Chairman B Ramalinga Raju brought an

illustrious corporate career to an undignified end.

A poster boy of Indian business after setting Satyam on a path of high growth, hiring
thousands of staff and bagging lucrative outsourcing contracts from overseas clients, Raju
admitted on Wednesday that profits at the company had been falsely inflated for years.
India's biggest corporate scandal in memory hammered Satyam's shares, which had
already been under pressure since last month.

The stock fell more than 80 per cent on Wednesday, leaving the company worth around
$500 million, against nearer $7 billion just six months ago.

Life for the 54-year-old Satyam chief became tough last month after a botched attempt to
buy two firms partly owned by the company's founders, which he said on Wednesday
was a final attempt to resolve the problem of the fictitious assets.

"It was like riding a tiger, not knowing how to get off without being eaten," he said in his
resignation letter. His problems were compounded last month when the World Bank
barred Satyam from business, citing "improper benefits" given to Bank officials. Satyam
has demanded the World Bank retract those comments.

But nothing prepared investors for Raju's stunning revelation of years of inflated profits
based on non-existent assets. He acknowledged no other board member had been aware
of the financial irregularities, and insisted he had not profited from the company's inflated
results.

Soft-spoken Raju, born into a family of farmers, said he was prepared to face up to the
legal consequences of a scandal that analysts swiftly dubbed as "India's Enron". "This
development was the last straw to break the camel's back," said Sudin Apte, country head
of Forrester.

"I believe possibly a third of "It was like riding a tiger, not knowing how to get off
Satyam's clients will exit in the without being eaten," said Satyam Computer Services
next two-three months." Indian Chairman B Ramalinga Raju in his resignation letter.
market regulators and
government officials were
quick to condemn, and banker
Merrill Lynch terminated its engagement with Satyam, which counts General Electric and
Nestle among its clients.

A management graduate from Ohio University, Raju moved away from agriculture to
start a textile unit in 1977 before later moving into real estate.
In 1987, he founded Satyam Computer along with his brother B Rama Raju and brother-
in-law DVS. Raju, taking the company public four years later. That year, he won his first
offshore contract from US tractor maker John Deere & Co.

Raju steered the company in the next decade, snapping up joint ventures with GE and US
defence and auto parts firm TRW Inc, which was acquired in 2002 by Northrop
Grumman. Raju was among the first to spot the outsourcing opportunities of the turn-of-
the-millennium Y2K computer problem, which saw the coming-of-age of Indian
outsourcers, including Infosys Technologies and Wipro.

He then followed up with six acquisitions over the next few years, taking the firm's
headcount to more than 53,000 working in software facilities in India and overseas.

With growth slowing sharply for Indian outsourcers due to the global economic turmoil,
Satyam's new management will have an additional challenge – how to boost sagging
morale among staff, customers and shareholders.

And Raju, the Ernst & Young Entrepreneur of the Year in 2007, will be left having to
watch from the sidelines rather than calling the shots at Satyam, which in Sanskrit means
'truth'.

Ramalinga Raju: From Andhra's pride to disgrace

By IANS
Thursday, 08 January 2009, 06:51 IST

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Hyderabad: Satyam was the brand image of Andhra Pradesh, Hyderabad was identified
with this company, and its founder-chairman B. Ramalinga Raju was a hero to
youngsters. But overnight, arguably the biggest fraud in India's corporate history has
reduced the chairman and his company to a big zero.

The man who spent three decades in IT services and built Satyam into India's fourth
largest IT services firm, was described as a visionary, a global business leader and a
thinker. Now, the angry shareholders want him to be put behind bars.
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Ramalinga Raju resigned as the company chairman Wednesday after confessing to a 40

billion ($823 million) fraud that was going on for years.

Even when crisis hit Satyam following the management's aborted bid to acquire Maytas
Infra and Maytas Properties, the two infrastructure companies owned by the promoters'
family, Ramalinga Raju's wellwishers launched a website to repose faith in his
leadership.

Having made a humble beginning to rise to the dizzy heights of success and become one
of the richest Indians, Ramalinga Raju was described as the pride of Andhra Pradesh and
the pride of Telugus.

He was born to a farmer B. Satyanarayana Raju in Garagaparru village in West Godavari

district of coastal Andhra Pradesh Sep 16, 1954. Satyanarayana Raju moved to
Hyderabad in the 1960s.

Ramalinga Raju did his B.Com from Andhra Loyola College in Vijayawada and went to
the US in 1975 for MBA degree from Ohio University. He is also an alumnus of Harvard
Business School.

He first ventured into construction and textiles business before moving over to IT.

He founded Satyam in 1987 and was so influenced by his father that he named the
company after him. It was a humble beginning for Satyam with only 20 employees.
Satyam Computer Services Ltd was incorporated in 1989 and it went public in 1992.

Satyam later became one of the earliest companies to get a dedicated data link for
offshore development.

Through his managerial skills and quality leadership, Ramalinga Raju built Satyam into a
multinational company and bagged several key contracts, especially from the US.

Satyam began trading on New York Stock Exchange in 2001. With each passing year,
Satyam strengthened its position and extended its operations to various locations.

Ramalinga Raju's foray into corporate data and internet services too was path breaking.
He founded Satyam Infoway or Sify and listed it on Nasdaq with great success. The
business process outsourcing (BPO) wing of Satyam also made a remarkable beginning.

The company, whose revenues crossed $2 billion in 2007-08, became the first Indian
company to list its American Depository Shares (ADS) on Euronext, which is one single
cross-border trading platform of NYSE Euronext Group.

A soft-spoken Ramalinga Raju received several awards during his career, including Ernst
& Young entrepreneur of the years 1999 and 2007, Andhra Pradesh Academy of Sciences
medal 1999, Dataquest IT man of the year 2000, CNBC Asian Business leader -
corporate citizen of the year award 2002, Hyderabad Management Association life time
achievement award 2006, and honorary doctorate by Jawaharlal Nehru Technological
University 2006.

He was elected to several organisations, including the National Association of Software

and Services Companies (Nasscom), the apex forum of the Indian IT industry.

Ramalinga Raju, married to Nandini, has two sons and a daughter. His sons Teja B. Raju
and Rama B. Raju are running Maytas Infrastructure and Maytas Properties.

The man who was once described as pride of Telugus, is today the target of their wrath.

"Ramalinga Raju was a hero till the last quarter of 2008 but today he is a zero. I was one
of his biggest fans but today I am very upset," said Harish Chandra Prasad, vice-chairman
of the Confederation of Indian Industry, Andhra Pradesh.

When Ramalinga Raju (born September 16, 1954, Andhra Pradesh) was born to a
wealthy agricultural family. He took over the family business consisting of construction
besides agriculture when his grandfather died. He is the founder of Satyam group which
has become a multinational company. His net worth is estimated to be $650 million
according to Forbes.

Education & Career of Ramalinga Raju

Ramalinga Raju completed his graduation, B.Com., in 1975 from Andhra Loyola College
at Vijayawada, Andhra Pradesh and took his MBA from Ohio University. He also went to
Harvard for the Owner / President course. He returned to India in 1977 and set up Sri
Satyam, a spinning and weaving mill. He started Satyam Constructions, a real estate
business.
It was in the late eighties that he took interest in IT and started a company Satyam
Computer Services in 1987. Later in 1995 Satyam Infoway (Sify) was launched, the first
Indian internet service market. Satyam serves 44 Fortune 500 and more than 390
multinational corporations. Satyam became a Rs 1,890 crore group in 2001-2002.

Important Works of Ramalinga Raju

Satyam was perhaps the first Indian company to move into outsourcing in 1991
beginning with John Deere & Co at Molin (Illinois) where JD & Co was located. Later
Satyam floated a number of subsidiaries mainly marketing outfits such as Satyam Asia
(Singapore), Satyam Japan, and Satyam Europe (Basington, London).

There were smaller ones for specific short term work such as Vision Labs and Dr
Millennium for Y2K-related work. Most of these subsidiaries were no longer viable.
Some were wound up. The biggest of these subsidiaries is the Satyam Infoway. Sify
started as an electronic data interchange (EDI) company. The company became an
Internet service provider and in 1999 the first Indian Internet company to be listed on the
NASDAQ.

In collaboration with Carnegie Mellon University in 1999, SCS evolved quality standards
for business process outsourcing companies called ‘eSCM’. Satyam Computer Services
bought over Sify’s software business for $6.9 million. Satyam Computer Services is one
of the Top 20 exporters. Satyam has also launched its operations in China in domain
expertise.

Awards and Achievements for Ramalinga Raju

Ramalinga Raju received several awards and honors including E&Y Entrepreneur of the
Year (2007); Asia Business Leader Award by CNBC (2002); Dataquest IT Man of the
Year Award (2000) and Ernst & Young Entrepreneur of the Year Services award (1999).

Average:
0

Ex-Satyam-
http://freshersworld.com/news/B-Ramalinga-Raju-%3A-

chief-now-CEO-of-jail-BPO

October 30, 2010 Category : News & Events

Although disgraced, ex- Satyam chief is still the CEO. This time not of Satyam but CEO
of jail BPO unit. After Supreme court rejected the bail plea of B Ramalinga Raju, the
state prison cheif has come up with an assignment for him.

The state prisons department is toying with the idea of using Raju's expertise in handling
operations efficiently at the country's first prison BPO unit, which is all set to start
operations on November 1. Though on a trial basis for now, prison officials hope that the
BPO venture would benefit from IT czar Raju's long years of experience in making such
projects a profitable venture. Well, this is assuming that his health permits him to stay
behind bars and not in a hospital.

According to C N Gopinatha Reddy, director general of prisons. "We will use his ideas to
improve the existing infrastructure and also seek his opinion on how best to utilise
manpower available at our unit." This would also keep Raju occupied.

The prison department has already started negotiations with some banking sector firms in
Canada to pocket the first international project for the BPO. The BPO workers for this
project too will be required to closely examine scanned documents in various categories.
Needless to say, these documents would be of a non-confidential nature, and there is no
scope of tampering by the BPO workers, who are all convicted prisoners.The guest list
for the inauguration would include Union home minister P Chidambaram, among others.

About B Ramalinga Raju

Mr. Ramalinga Raju holds a Master of Business Administration degree from Ohio
University and has attended the Advanced Management Program conducted by
Harvard Business School.

Mr. Raju founded Satyam Computer Services in 1987 and has been instrumental in
developing Satyam into one of the top Indian IT services company. Among the many
awards received by him, Mr. Raju was awarded the Corporate Citizen of the Year award
during the Asian Business Leadership Summit held in Hong Kong in 2002. He was also
named as the IT Man of the Year by Dataquest in 2001 and was conferred the
Entrepreneur of the Year Award by Ernst & Young, India in 2007.
Disgrace

In early 2009, B. Ramalinga Raju, the founder and chairman of Satyam Computer
Services, wrote a letter to the company's board saying, " It is with deep regret, and
tremendous burden that I am carrying on my conscience, that I would like to bring the
following facts to your notice."

Among the startling facts Mr. Raju disclosed in the letter was that most of the cash on the
company’s balance sheet did not exist, that Satyam’s revenue had been overstated for
years, and that its real profit for the quarter that ended Sept. 30 was only $12.5 million —
rather than the $136 million the company had reported to investors. Mr. Raju, in other
words, had been cooking the books.

Earlier Raju had tried to push through a deal to buy two companies in which he held
ownership interests — Maytas Infra and Maytas Properties, which were run by his sons.
(Maytas is Satyam spelled backward.) Satyam’s directors had rubber-stamped the deal —
but to the surprise of the Indian business community, accustomed to seeing such inside
deals go through, Satyam’s shareholders revolted.

Institutional investors denounced Mr. Raju for seeking to buy infrastructure and real
estate companies that were far afield from technology outsourcing. Indian mutual fund
managers complained anonymously in the business pages that Mr. Raju was using
shareholders’ money to give himself and his sons a rich and undeserved payday. The
board was raked over the coals in the press for approving the deal. The stock was
pummeled.

And lo and behold, the investor backlash succeeded: Mr. Raju beat a hasty retreat and
withdrew the offer to buy the two companies. Even after the deal fell through, it remained
big news. Some thought it gave India a black eye, because it exposed the country’s
lackadaisical attitude toward corporate governance. Others thought it would ultimately be
good for India, because it showed all Indian investors that they did not have to roll over
every time a corporate executive tried to pull a fast one. No one, however, realized the
truth.
As Mr. Raju put it in his letter, “The aborted Maytas acquisition deal was the last attempt
to fill the fictitious assets with real ones.” When the deal fell through, the jig was up.

Ramalinga Raju Profile

Born: September 16, 1954
Achievement: Founder and Chairman of Satyam Computer Services Ltd; Chosen as
Ernst & Young Entrepreneur of the Year for Services in 1999

Ramalinga Raju is one of the pioneers of the Information Technology industry in India.
He is the founder and Chairman of Satyam Computer Services Ltd.

Ramalinga Raju was born on September 16, 1954 in a family of farmers. He did his B.
Com from Andhra Loyola College at Vijayawada and subsequently did his MBA from
Ohio University, USA. Ramalinga Raju had a stint at Harvard too. He attended the
Owner / President course at Harvard.

After returning to India in 1977, Ramalinga Raju moved away from the traditional
agriculture business and set up a spinning and weaving mill named Sri Satyam. .
Thereafter he shifted to the real estate business and started a construction company called
Satyam Constructions. In 1987,
Ramalinga Raju founded Satyam
Computer Services along with one
of his brothers-in-law, DVS Raju. The company went public in 1992. With the launch of
Satyam Infoway (Sify) Satyam became one of the first to enter Indian internet service
market. Today, Satyam has a global presence and serves 44 Fortune 500 and over 390
multinational corporations.

Ramalinga Raju has won several awards and honors. These include Ernst & Young
Entrepreneur of the Year for Services in 1999, Dataquest IT Man of the Year in 2000,
CNBC's Asian Business Leader - Corporate Citizen of the Year award in 2002 and E&Y
Entrepreneur of the Year Award in 2007.

The ever-soaring share prices of Satyam witnessed a sharp decline in December 2008,
following a failed acquisition attempt involving Maytas, a company owned by Raju's
family. In January 2009, Raju resigned as the Chairman of Satyam after he admitted to
major financial wrong-doings. In Januray 2009, Raju confessed of his involvement in
inflating the profits of the company for the past couple of years. The 7,800-crore fraud
started with an initial cover-up for a poor quarterly performance and assumed massive
proportion, with time.
Biography of Ramalinga Raju
Ramalinga Raju, is an Indian businessman, and a pioneer of the Information Technology
industry in India.. He is the Chairman of Satyam Computer Services Ltd. It was founded
in the late 1980′s after venturing earlier into other businesses such as construction and
textiles.

Ramalinga Raju was born on September 16, 1954 in a family of farmers. He did his B.
Com from Andhra Loyola College at Vijayawada and subsequently did his MBA from
Ohio University, USA. Ramalinga Raju had a stint at Harvard too. He attended the
Owner / President course at Harvard.

After returning to India in 1977, Ramalinga Raju moved away from the traditional
agriculture business and set up a spinning and weaving mill named Sri Satyam. .
Thereafter he shifted to the real estate business and started a construction company called
Satyam Constructions. In 1987, Ramalinga Raju founded Satyam Computer Services
along with one of his brothers-in-law, DVS Raju. The company went public in 1992.
With the launch of Satyam Infoway (Sify) Satyam became one of the first to enter Indian
internet service market. Today, Satyam has a global presence and serves 44 Fortune 500
and over 390 multinational corporations.

Now the company has rapidly developed and became a true multinational company with
thousands of employees spread over multiple countries.

Ramalinga Raju has won several awards and honors. These include Ernst & Young
Entrepreneur of the Year for Services in 1999, Dataquest IT Man of the Year in 2000,
and CNBC’s Asian Business Leader – Corporate Citizen of the Year award in 2002.

It took the Satyam founder more than two decades to achieve fame and less than two
weeks to turn into a rogue figure, when on 7th Jan 2009, he accepted the fraud of billions
of rupee in the company, done by him.

Refer
Ramalinga Raju- billionaire to Add
Idea
pauper: What lesson should we
learn from him?
Started by : Veena Gupta, Analyst, Blackstone Group 1 year ago
Industry : Radio, TV & FilmsFunctional Area : Getting
 Started(Entrepreneurship)
Keywords : satyam billionaire ramalinga raju penniless pauper satyam
fraud case billionire
Activity: 60 referals 127 views; last activity : 8 months ago

Former Chairman of Satyam Computers,

Ramalinga Raju, who inflated his
company's assets by over $1 billion, has
been declared a 'pauper' and has been
exempted from paying court costs. Raju is
now unable to engage an attorney in the U.S.
to defend himself in the class action
litigation and to pay any court fees or to
meet any financial obligations which might
be imposed on him. Court finds that Raju
has adequately demonstrated that he is
unable to pay costs as described in the
federal law of USA.

So users, what do you think we should learn

from the story of Ramalinga Raju?

•
 • 1
• 2
• 3
• 4
• 5

Rate :

30

12

1 We should pay taxes honestly

2 Auditors should introspect and learn lessons!!
Add New Idea
Ideas in: "Ramalinga Raju- billionaire to pauper: What lesson should
we learn from him?"
Support idea

We should pay taxes honestly

idea posted by Veena Gupta Analyst, Blackstone Group
3
There is lot to learn from this saga , specially the young entrepreneurs who
blindly follow tax consultants who listen to save few bucks which piles up and
goes out of hand but forget that tax is the form of income for our government
and if all the rich pays it, India would become a G10 country too. But the
problem with Indian people are that they never want to manage taxes but only
not pay taxes. I know a lot of companies who cut TDS from their payments but
do not pay that amount to the government. The explanation given for not
paying taxes is that the government does not utilise these funds for the
development of the nation. Most of these tax amount is spend and acounted on
books, but is it actually being spend for the country. But I still believe that we
should pay our taxes because only then a small percentage gets converted into
development. So please young entrepreneurs, have transparency in all your
dealings and help India by paying your taxes on time.

by Makrand Bhave, Marketing & MICE, WIZCRAFT International | 1 year ago

Veena I agree!
0

by Gilbert PRIEUR, Morphopsychologist Expert, Nemopsy | 1 year ago

I think there is no alternative. Taxes are to be paid even

if it is difficult. It is like paying assurance fee or bread
to eat.

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Auditors should introspect and learn lessons!!

idea posted by SR Sham Sunder CEO/MD/Director Technoaid
0
I don't think Raju is a pauper. He will have enough for few generations -
slashed away. There will be lot of assets he can fall back on. He did not expect
things will go wrong as badly but he is not a total idiot. Now for the lesson to
be learnt - there is not much for general public or the entrepreneur class. But
for the auditor cross section, this will be a lesson for their entire professional
life!!

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Name :

Ramalinga Raju

Gender : Male Date of birth : Sep 16, 1954 City : Bhimavram State/Region : Andhra
Pradesh Country : India
It is widely known in the state of Andhra Pradesh and also throughout India, in the
larger context, that when Chandra Babu Naidu, the prior Chief Minister was called
the CEO or the Chief Executive Officer of Cyberabad, but in real terms the acclaimed
crowned prince in the sector of Information Technology was B. Ramalinga Raju. He is
the captain of the sector of the Information Technology in Hyderabad being the
Chairman of the Satyam Computers. In the industrial climate of India he is credited
as not only as a venerate businessman but also as a pioneer of the Information
Technology industry of the natuinal repute.

He was born in Bhimavaram and from his childhood was highly influenced by his
father. He was an average student in class. Completing his degree from the Loyola
College at Vijayawada he went to US to pursue his cherished course of the MBA. At
this juncture a sea change occurred withiin him that transformed him abruptly. He
came to know a lot in the US and had his eye fixed on the software boom ahead and
outsourcing. It was followed by his starting of an IT company with just 20 employees
but was competent enough to garner multitude of IT projects from the companies
hailing from the United states of America. By virtue of his intense effort the company
has rapidly developed becoming a true multinational company now employing
thousands of persons spread over multiple countries and a net worth of billions.

At present the Satyam Computers starting form a trivial background has become a
giant software service empire through the toil of years. It is at present with a
turnover of Rs. 400 crore and a net profit of Rs. 80 Crore that ranks among the top
five in the country. He has his eyes fixed on the concept of the World Wide Web.
Taking his zeal into consideration, it is opined by the experts, that it is matter of
years when he will be included in the list of the first ranked entrepreneurs in the
international arena. It seems that after the initial success in the field of Information
Technology the national prestige will reach the zenith through this ever-creative
person.

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