An economic offences court here has sentenced Satyam founder B Ramalinga Raju and three other former executives of the IT giant to six months imprisonment and imposed a fine of Rs 10 lakh on each.
The convicted include Raju’s brother Rama Raju, Mynampati Ram (both directors) and Vadlamani Srinivas (CFO) who held top positions in the Hyderabad-based company and played an active role in the Satyam fraud. Four other former directors were also convicted but got away with given fines of Rs 20,000 each.
The Satyam fraud came to light in January 2009 when Ramalinga Raju, till then considered a poster boy of India’s IT success story, admitted to embezzlement and an accounting fraud of more than Rs 5,000 crore.
Soon after the revelation of the mammoth fraud that shook India’s corporate sector, Raju and others were arrested by the Andhra Pradesh CID. Various agencies like the Central Bureau of Investigation (CBI), Enforcement Directorate (ED) and the Serious Fraud Investigations Office (SFIO) began their individual, parallel investigations into the matter.
After a heart attack, Raju was granted bail in September 2009 by a court. He is currently is out on bail.
The present case pertains to the probe by SFIO for violation of Companies Act provisions by Satyam, which was taken over by Tech Mahindra, a Mahindra & Mahindra group company, via a public auction following the fraud. The two companies formally merged and created a new company called Mahindra Satyam in 2013. When the fraud came to light, Satyam was Inda’s fourth largest IT services company after TCS, Infosys and Wipro.
“The SFIO had conducted the probe, collected evidence against the accused and had filed a private complaint as per the Companies Act. The trial began in 2009 and today the verdict found the accused to be guilty,” Chittaravu Raghu, special prosecutor in the case, told HT.
The court gave Raju and others one month to appeal against its verdict.
The conviction comes as a precursor to the main case in the scam which is beingprobed by the CBI. A judgment in the case is due on December 23.