Notwithstanding his constant exhortations that his employees adopt a global mindset in the shrinking world, Ramalinga Raju himself never followed this advice. In the end, it was his primeval lust for land that felled the IT czar and took him straight to jail.
When he confessed to inflating his accounts books in January 2009, Raju sat on at least 9,000 acres of prime land across a clutch of cities including Hyderabad, Bangalore, Chennai and Nagpur.
He lusted for more and bid successfully for the Hyderabad Metro Rail project lured by the offer of realty that came along with the deal. Even as he was running Satyam, a company that gave him enor mous prestige and standing, Raju was busy with his real estate company Maytas. This was a company established in 1988 (albeit with a different name), a year after Satyam was founded.
But Raju's deeds caught up with him in the wake of the global meltdown that diminished the value of his landholdings and left with him no moolah.
Stories suggest that Raju also had invested politicians' wealth in real estate. With the 2009 elections around the corner, the netas asked for their cash but Raju could not return it: the falling realty prices had melted them. Thus to get them off his back, Raju confessed.
Armed with an MBA from Ohio, Ramalinga Raju came back to India as a confused 23-year-old in 1977. His father, an ambitious man who was into grape farming, handed over a fledgling hotel business to him. For the next few years, Raju ran this unsuccessfully. Then he started a spinning mill buoyed by the success of Dhirubhai Ambani in the textile business! This also went nowhere.
Satyam Computers was kick-started in April 1987 on the advice of D V S Raju, an electronics engineer who studied alongside Ramalinga in Ohio.
The operation of the company was left in the hands DVS and under him Satyam in 1992 pioneered the offshore business of writing software solutions from India. The first client was tractor giant John Deere, who were lured by the low costs.
But after getting a hang of the business, Raju got rid of DVS (who now owns the Gangavaram port in Visakhapatnam). Since Raju and his younger brother Rama Raju (who were like a Rama-Lakshmana jodi) knew nothing about the technical side of the IT business, in came Srini Raju, the co-brother in law of Ramalinga Raju.
For the next few years Srini Raju, an engineer who had worked in Texas Instruments, ran Satyam powering it through as an internet service provider and Y2K business. Many subsidiaries were spawned, including
Satyam Infoways that was listed on NASDAQ and traded at double its face value on the first day . Now Ramalinga Raju realized that there were big bucks in the US and soon Satyam was to follow with an ADR issue. Even as this was happening, Ramalinga maneuvered Srini out of Satyam and took charge of the company along with his brother Rama.
By now it was 2001. In his confession, Raju had admitted that he began fudging books of accounts from 2001 in other words as soon as he got total control of the company . Satyam's scrip was also among the K-10 scrips, in which share market racketeer Ketan Parekh invested heavily .Satyam Infoway also bought some e-sites at fabulous prices and stories suggested that part of the inflated sums paid came back to Raju as kickbacks.
But at home his prestige was growing, what with chief minister Chandrababu Naidu adopting him as the mascot of rising Hyderabad. Naidu, who clearly knew nothing of Raju beyond the obvious, put him up on the stage along with visiting US President Clinton, much to the chagrin of established industrialists.
Now Raju, who had an inferiority complex vis-a-vis N R Narayanamurthy and Azim Premji, wanted to rival them. So he began to run faster and faster to furiously cook his book of accounts and inflate profits. This led to increasing prices of scrip of Satyam and Raju cashed in by offloading the promoter's shares in the market or by using them as collaterals to borrow from banks. Starting with 80 per cent promoters' shares, Raju ended with zero shareholding by the time he gave in. The money so raised was used to buy land across the country .
Raju was a Dr Jekyll and Mr Hyde rolled into one. While the unscrupulous Mr Hyde broke laws and fudged accounts, Dr Jekyll was a good, considerate employer with no airs about himself and a social do-gooder who also pioneered the EMRI number 108 that could be activated to call an ambulance to the doorsteps. But in the end, fate caught up with Raju and his good deeds could not save him.
No comments:
Post a Comment