A special CBI court sentenced former Satyam chief B Ramalinga Raju and his brother on Thursday to seven years in jail and fined them Rs 5.5 crore each for forging documents and falsifying accounts in the country's biggest-ever corporate accounting fraud scandal.
Raju, once the poster boy of the IT industry, fell from grace in 2009 when he confessed to shareholders about overstating profits for years and inflating the company's balance sheet, sending shockwaves through the sector.
He has already spent 32 months in jail in connection with the scam that caused an estimated loss of Rs 14, 162 crore to investors, according to the Central Bureau of Investigation.
"I am of the opinion that a case involving economic offences, having a deep-rooted conspiracy and causing a huge loss of investor money, needs to be viewed seriously and considered as grave offences affecting the reputation of the corporate system of the country as a whole and the economy of the country. It is not a fit case for taking a lenient view on the quantum of sentence," judge B V L N Chakravarthy said, rejecting a plea of leniency because of Raju's philanthropic activities.
Apart from the former Satyam chief and his brother Rama Raju, eight others -- including former chief financial officer Srinivas Vadlamani, former PricewaterhouseCooper auditors S Gopalakrishnan and Talluri Srinivas -- were also sentenced to seven years rigorous imprisonment and fined over Rs 25 lakh each. All 10 accused in the case were convicted of criminal conspiracy, cheating and breaching public trust.
Raju's confession came as a jolt for the industry that attributed his success to dedication and hard work in Hyderabad, where joining Satyam used to be a craze among techies.
"The concern was that poor performance would result in a takeover. It was like riding a tiger, not knowing how to get off without being eaten," he wrote in his letter to shareholders on January 7, 2009.
Two days later, the board of the then fourth-largest Indian IT firm was dissolved and market regulator Sebi initiated a probe that found the company had misrepresented its accounts to its board, stock exchanges, regulators, investors and all other stakeholders. Even basic facts such as revenues, operating profits, interest liabilities and cash balances were grossly inflated to show the company in good health.Raju was arrested the same day and sent to prison before the Supreme Court granted him bail in November 2011. Tech Mahindra bought the Hyderabad-based Satyam in April 2009, saving it from collapse.