January 7, 2009 will be etched in the annals of India's corporate history as it brought to light one of the biggest scams in India. It was on this day that chairman B Ramalinga Raju of Satyam Computer Services considered to be one of the torchbearers of India's new economy, confessed to a corporate fraud amounting to Rs 7,800 crore (Rs 78 billion).In a letter to the board, confessing his misdeed, Raju said: "Every attempt to eliminate the (balance sheet) gap failed. As the promoters held a small percentage of equity, the concern was that poor performance would result in a takeover, thereby exposing the gap. It amounted to riding a tiger without knowing how to get off and not yet eaten by the tiger. While the existing board was subsequently dissolved, and Raju and his brother Rama Raju, and the company's chief financial officer Srinivas Vadlamani were remanded to judicial custody, the future of 53,000 employees looked uncertain. Then government formed a new board with HDFC chairman Deepak Parekh, former president of Nasscom Kiran Karnik and former Sebi member C Achuthan as the members untill it was taken over by Tech Mahindra (owned by the $6.3 billion Mahindra Group) in an open auction in April. Two months after taking over scam-tainted Satyam Computer Services, Tech Mahindra Sunday renamed the IT major as Mahindra Satyam. The logo was adopted from the Mahindra Group. Ever since the Tech Mahindra group took over the company and brought the cash inflow, Mahindra Satyam has come up with flying colors. It is soaring high on... [continues]
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