In July 2014, I noted here that although it had taken over five years, the wheels of justice were finally in motion against B. Ramalinga Raju, former chairman and CEO of Satyam Computer Services, as India's securities regulator had ordered Raju, his brother, and two others to disgorge $307 million. In January 2009, Raju publicly admitted in a letter to Sayam's board of directors that he had engaged in a $1 billion financial fraud. In the letter, Raju stated that the falsification of Satyam's financial records began as one-time effort to hide a bad quarter but then spiraled out of control to the point that it “was like riding a tiger, not knowing when to get off without being eaten.”

 

Although the Satyam fraud came to light because of Raju's confession note (in which he announced that he would resign and “subject myself to the laws of the land”), Raju "retracted" his 2009 confession a year later, and declared that all of the charges alleged against him by the Indian authorities were false. As a result, Raju and others accused in the Satyam fraud faced a criminal trial in June 2014. 

 

Yesterday, an Indian trial court sentenced Raju, his brother, and three others to six months in prison plus fines for each defendant of Rs 10 lakh (approximately $16,000). FirstPost reports that while the sentence seems extremely light for the massive fraud that is regarded as "India's Enron," this case is not the "main trial" against Raju. There is reportedly another trial being prosecuted by India's Central Bureau of Investigation in the city of Hyderabad in which a verdict is expected on December 23. FirstPost reports that the consequences in that case "could be something harsher."

Topics