Ramalinga Raju – The fraud King

Close on the heels of the Bernie Madoff Ponzi scam in the US, Ramalinga Raju has tarnished the Indian industry with a scam that has been running for years. The Satyam balance sheet was inflated by Rs 5040 crores.  To control it, he even took Rs 1230 crores worth of loans.  What started off as a small accounting glitch and was hidden from the shareholders and the public has now grown so big that in a last ditch effort, Ramalinga Raju even tried to buy over a real estate firm Maytas so that he could cover the hole created by the fraud with another fraud.  When the investors took umbrage to it and hammered the stock, Raju had the cheek to come on live TV and brush it off.

INDIA-IT-SATYAM-EARNINGSIt was a clear case of a crook who had grown too big for his boots.  Even today Raju wouldnt have resigned if not for the fact that some of the shares that he and his family had pledged with some private Financial Institutions were sold off by the FIs as the stock was being hammered post the Satyam-Maytas deal.

Now, Ramalinga Raju would like us to believe that none of the directors had any inkling of the scam that had been going on for years.  If this is the kind of transperency that an independent director brings to the company, its high time they are taken to task.  And what about the auditors who were supposed to look into the balance sheets and raise a flag?  How did Raju manage to hide the scam all these years from the independent directors and the auditors?  If he was so cunning, then Raju deserves to be punished heavily and also the government should make sure that all the auditing firms that audited the Satyam books in the past years should be banned from taking up anymore business in the country.

If Raju had managed to shut the mouths of the directors and auditors with generous payment, it simply shows his audacity.  He should be given exemplerary punishment and made an example just for the fact that he has poured cold water on all the efforts by the government and genuine companies in projecting India as a safe investment hub.

Am appaled and outraged to see that a Chairman of a company could take the shareholders, SEBI, the auditors, the directors, the government and its agencies for a ride all these years.  As an investor in the Indian stock market, i have completely lost faith in the system. I dont know what to do with all the reporting and the balance sheets that the companies put forth.  Should i believe them at face value?  If the management has the audacity to silence the auditors and the independent directors, what choice does a normal investor like me have?

Ramalinga Raju, the auditors, the independent directors and everyone else associated with the scam need to be punished hard by the law enforcement agencies.  He is a blot on the Indian business scene.

I can only have sympathy for the minority investors in Satyam whose stock was hammered today by more than 77%.  What about the thousands of employees of Satyam who put in their hard work only for the head of the company to take them for a ride.

My previous take on the Satyam-Maytas deals here, here

An insider’s take on the Satyam fiasco.



  1. varunavi says:

    What Ramesh Galli has done to GTB, Raju has done to Satyam.Employees suffer the most.I was in GTB when the fraud was done,we have hell those days,the customers used to shout at us,too much of deposits withdrawals,cash was short,two days we didnt go for lunch,it was horrible

  2. soham says:

    It certainly was horrible and scary – For indian economy, india’s image, trust and relationship ..

    If a giant company like Satyam is involved in such a huge scam, whom to trust now ?? .. Where will people go ?? .. Where do they invest money ?? .. After all, everything depends on trust these days !! ..

    I m just remembering the song: Ke Raju ban gaya cheater, ke raju ban gaya fraud !!

  3. Chittaranjan says:

    OMG! The tip-of-the-iceberg that was the failed Maytas deal has now risen into this full-blown fraudberg that has hit the Indian IT industry hard!

    We can only imagine the plight of the employees…I’ve several friends amongst them and am afraid to even call them up and ask how they feel 😦

  4. amolpatil2k says:

    As bloggers, it is okay to take things lightly, call them crap from an idle brain and so on but like all else this is yet another opportunity to showcase our talent as sleuths.

    The overall tide is that the system in some form or the other always ends up tricking the common man. This happens everyday and everywhere and we “sleuths” miss the forest for the trees.

    It is surprising that we use wordpress and blogspot to tell our stories but don’t use google to add meat to them. People have lost trust in the mainstream media and are looking more and more towards blogs to tell them the truth.

    The worst thing about blogs is that no one takes us seriously and so we don’t take ourselves seriously. The only way is to forget about traffic and stats and frequency. Actually the detailed procedure looks something like this:

    (1) Forget that you have a blog which you need to update frequently and for which you need to build traffic etc.

    (2) Now read the papers, watch tv, talk to friends etc. At night in bed before sleeping, see if you are thinking about something, curious about something etc. Let’s say you are thinking about Raju.

    (3) Now try to find out from papers, TV, Net etc about what might have really happened.

    (4) Based on all this looking around form a broad suspicion about what might have actually happened. Again check with the Net, say Google Blog search whether someone is having the same sort of suspicion.

    (5) If you feel that there is some meat in your suspicion, look for sources which can be presented in your arguments.

    (6) Now structure your post the same way. Spell out the few basic statements about Satyam, then spell out your main suspicion and finally back it up with all the supporting material.

    (7) After few days, if you don’t see a commensurate amount of traffic, don’t worry. Google and other sources of traffic are not perfect. Feel happy that your post is perfect.

    (8) If you do it often enough, you would start to get the hang of it. Then you’ll see Google becoming receptive even though your aim now is perfection not Google.

    (9) Always keep an ear out for other posts on the same subject and all the comments on your posts and on those other posts. This would sharpen your reporting even further.

    (10) The beauty about having our own blog and keeping things informal is that we don’t have to suffer from the same pressures that cripple mainstream media. This freshness is what will appeal to our human readers and that is what matters more than any search bots.

  5. Chirag says:

    Ahhh, Brillaint we are no more a third world country, We have enron, too. I am not much worried about the Satyam as it will fade away soon. The Idea is to now see what happens to PWC, its fucked. The Auditors getting Audited.

  6. vivek says:

    The best part is Madoff and Raju, neither of them would have been discovered if it wasn’t for the economic downturn. Btw, Raju has vanished I heard…that is smart of him.

  7. vivek says:

    i njyd ur blog. Can u add me to your blogroll? Will add you to mine as well…just let me know wen u do it!IGNORE this if u rnt intrstd…Happy new year!!!

  8. shaaakspsyco says:

    Shaaaks, bugger. Bugger, shaaaks!

  9. Liju Philip says:

    @Sarita, any updates on that Gelli fellow? Where is he these days? Behind the bars or relaxing at some resort somewhere?

    @Soham, Raju ban gaya nahin. Raju was always a cheater. 😉

    @YC, he has brought shame not only to the IT industry but also to the whole Indian industry and that’s why he should be punished severely.

    @Chirag, PwC has a real lousy reputation in the market. I hope it goes the Arthur Anderson way.

    @Vivek, according to Raju’s lawyer, that bugger is somewhere in hyd itself. The police are waiting for the right muhurat to catch him.
    Oh ya, i will add you to my blogroll. Do add me too to ur blogroll.

  10. varunavi says:

    Galli behind the bars no way, his dream to floating a insurance company flopped, as u said maybe relaxing in his posh villa

  11. varunavi says:

    ophs float a insurance co

  12. dinu says:

    was that name a coincidence? “SATYAM” truth ?????/

  13. Liju Philip says:

    @Sarita, that’s interesting. Am not surprised that Gelli is enjoying his loot. Trust Raju to also escape in some years time.

    @Dinu, oh well…. Satyam is now Asatyam 😉

  14. Amit says:

    And on top of this, Infosys chief said that they will not take any employee from the tainted company! Now what the hell has a normal employee to do with it?

  15. Liju Philip says:

    @Amit, i think the press highlighted it wrongly. Murthy was asked if he would take over the company, and he replied “Sorry, we dont touch a tainted company”.

    The media is having a field day with quotes and misquotes. Dont take them literally. There will be much fun going forth.

  16. anup kumar says:

    he is thief

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