Imagine waking up one morning to discover that God you followed, in fact, was the Devil in disguise.
The nation and stock markets were rattled on January 7, 2009 by a confessional statement from Byrraju Ramalinga Raju, the founder and since-deposed chairman of Satyam Computer Services, who admitted to cooking accounts, falsifying revenues and misleading shareholders for several years in the country’s fourth largest software exporter.
The numbers are still not clear, but in overstated revenues or siphoned money, the size of the fraud is estimated to be at least Rs. 7,800 crore.
It was like an earthquake rattling the four monumental pillars of the Charminar in Hyderabad, where Satyam is based.
Employees, customers, shareholders and citizens were all shaken by the actions of the man who epitomised a hardworking small-town boy who made it good in a globally challenging high-technology industry.
If his work raised the image of a city better known for its biryani to a proud listing on the New York Stock Exchange, the misdeeds he admitted to shook the image of India’s IT industry known for a charming blend of high-value work and solid ethics.
In hindsight, Raju, sporting gold-rimmed glasses and a soft-spoken personality, was a copybook hypocrite. His alleged accomplices in a game of selling false numbers were auditors from Pricewaterhouse, whose name for many meant independence and integrity.
The name Satyam, meaning truth in Sanskrit, was the perfect subject for black humour.
One year after the scandal’s high, emotional scars remain in Satyam’s plush offices.
A senior executive forming part of Satyam’s 10-member executive management team recalls the horror of first discovering on December 16 that Raju wanted to merge in Maytas Infrastructure, the realty company controlled by his family, into the software giant, and then the January 7 confession sent to stock exchanges and regulators.
Maytas – the reverse spelling of Satyam -- suffered in a realty price bubble and Satyam from fraudulent accounts. The Raju family connected the two that apparently gained from common finances and political links.
“The confession was more probably like a climax of a movie. My problem started on December 16. That was a decision which was not even discussed with any one of us. One fine evening we were told that we had acquired Maytas Infrastructure (a group firm). Our discomfort started right then,” said the executive, not wanting to be identified.
“January 7 was a clear blow on the face. We were all preparing for the board meeting on the January 10. I was driving down to office when somebody called me to say whether I have seen the mail from the chairman,” he said.
“I immediately logged in and realised that it was a strange communication. We started calling Raju to find out what was going on and he was not picking up his phone. We got a message later from his office that he wants to have a brief chat with a few of us. He said he was sorry (and) these are the few things that I have done. The last conversation we had with him was about 10.30 am on January 7.”
“My first reaction was a sense of undiluted anger, then there was a sense of betrayal—how could he do it to us—and the third emotion was a sense of shame,” the executive said. “Why did he have to do all this?”
The Central government, waking up to the larger consequences of the scandal, invoked special provisions of company law to acquire control of Satyam’s operations and eventually found a rescuing suitor in the Mahindra group, which emerged as a white knight that put the Humpty and Dumpty of Satyam’s business and reputation together again. Piece by piece.