By T S Sudhir
If wishes were horses, Ramalinga Raju would have been watching the inaugural South Africa-Mexico match today in Johannesburg. By bagging the contract to be the IT services provider to the 2010 FIFA World Cup, Satyam and Raju had scored a huge goal.
The deal was struck during the days of pink slips in 2008. And Raju’s promise of a ten-year roadmap to resurrect football in India by spending 50 crore rupees, was seen as the daring of a sports lover who wanted to pull football in the country out of the red. The IT major was to organise inter-college tournaments in 4000 colleges in 40 universities in ten states. Raju logging on to football was seen as the best attachment the sport could have in India.
That was till 7th January, 2009 happened. The day Raju confessed that the Satyam he built was actually on foundations of `asatya’. His inability to get off the tiger transported him to Hyderabad’s Chanchalguda Prison where he became undertrial number 882. Till September.
Thanks in a way to Rajan Pillai, no jail or government has been able to take the `illness’ of a VIP behind bars quite so lightly. Raju’s reported medical condition (he was diagnosed with hepatitis C) took him to NIMS Hospital in Hyderabad. Since September, he has managed to stay out of jail, in the plush government hospital, except for a week in between.
Raju’s lawyers say his medical condition does not allow him to attend court proceedings as he risks catching an infection. The CBI points out that Raju has had no less than 275 visitors while in hospital and that medical excuses always come in handy to delay trial. So, armed with a chargesheet running into 1.5 lakh pages against Raju and nine co-accused, the CBI awaits the special court’s verdict on Monday, on whether Raju can be tried through videoconferencing. If it is allowed, it may be a case of deja vu for Raju, for who videocons were a way of reaching out to Satyam’s overseas clients and investors.
CBI’s dynamic DIG V V Lakshminarayana, who has handled this investigation, expects the court to pronounce a verdict in less than a year. Raju has been booked under Sections 409 and 467, for criminal breach of trust and for forgery. Both attract a sentence of life imprisonment.
Was he ever baffled by the audacity of Raju’s fraud, I ask Lakshminarayana. “Yes, we did spend the initial ten days just trying to understand the systems. Everything in a way followed from the 7th January letter, in which he anyway shocked everyone with the contents. After that it was more a process to unravel how he did what he did at Satyam between 2003 and 2009.”
Raju always suffered from a complex that his Satyam was not as big as the Big three in India : Infosys, TCS and Wipro. While they grew at above 25-40 per cent, Satyam was lagging at around 10-15 per cent. So he had to match up. And being an IT man, he knew a virus was enough to spike the system.
Between 2003 and 2009, Raju created 7561 false invoices to cook up 5117 crore rupees. Fake bank statements were then created to match the invoices. And since the money was said to be deposited in banks, fixed deposits were created. All this money was shown as revenue and was reflected in the balance sheet. Satyam’s quarterly results began to look attractive. The gullible auditors looked at the different fake documents and signed blindly, assuming all was well in Raju’s kingdom.
Was all this just to show to the world that he ran a successful business? No. The idea was to keep the share price high and every quarter, benefitting from the insider knowledge they had, they would offload their shares. In six years, they allegedly made close to 2400 crore rupees. The money was used to purchase land in and around Hyderabad.
Raju’s brain worked overtime to plug all possible loopholes. He started recruiting to show that he needed more and more employees to handle a growing business. Some 15000 of the 53000 employees shown on the rolls, were forever on the bench, much higher in percentage terms than other companies. The HR department and his overseas clients matched the revenues with the number of employees and concluded all was well.
Ultimately, the pressure of paying salaries to nearly 30 per cent of his workforce, without generating work, began to show. Raju claims he pumped in 1230 crore rupees of his personal wealth into Satyam in 2007-08 but it is not reflected in the accounts. Reason : How could a company with bank FDs worth 5000 crore rupees, be shown borrowing a sum of 1230 crores? It would arouse suspicion, Raju reckoned.
During his interrogation by the CBI, Raju kept quoting from his confession statement. Lakshminarayana admits, almost with a hint of admiration for Raju’s arithemetic precision, that his letter was correct to the last digit. “But he avoided confessing the money the family members made by offloading the shares.”
Raju came clean, not because he wanted to, but because he had no other option. The Satyam Board had nixed his plan to merge Maytas Infra with Satyam and he was left gaping at this huge hole of the fictitious 5000 crore rupees. “There wasn’t any sense of regret in Raju. If the Maytas deal had gone through, he would have cited recession and sacked employees and tried to fill in the gaps,” says Lakshminarayana.
Were there differences between his version and that of Rama Raju, his brother and his CFO, Vadlamani Srinivas? “No. All of them were in league. Rama Raju has himself signed on many of the documents. He was aware of what was happening.”
What about his sons? Were they embarrassed about what their dad and uncle had done? “No. The sons also had made money. They were dejected more at their fall.”
The CBI fought a fierce legal battle for permission to get Raju to undergo a polygraph and brain mapping test. “We thought there could be facts he may not have revealed during his interrogation. But with the Supreme court ruling, that option is ruled out. Now our entire case against Raju is document-based. We are confident we have done a thorough job,” says the DIG.
The only missing links are Raju’s deals abroad, specifically in six countries, where the CBI has sent letter rogatories and is awaiting reply.
Meanwhile, Raju who gets to eat home-cooked food at NIMS hospital, can only follow the World Cup through the newspapers. He knows he has been shown a red card and sent off the field.
This month, Mahindra Satyam also will disconnect itself from Raju’s inglorious past, when it announces its restatement of accounts. It will be a new beginning for the company as Raju mulls his kal, aaj aur kal, all of which look equally bleak. Especially the tomorrow.