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Satyam moves on; Raju awaits trial

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Press Trust of India New Delhi
Last Updated : Jan 21 2013 | 1:24 AM IST

It'll be a year tomorrow since B Ramalinga Raju's explosive admission about an accounting fraud at Satyam, but the iconic IT firm that he founded has managed to move on and out of the shadows of the country's biggest corporate scam.

Raju, who saw his image turn from IT industry poster-boy to conman, is in jail awaiting trial.

"People have started detaching Satyam from Raju... They realised its only the promoter of the company and not the company itself that was tainted," said C P Gurnani, CEO of Mahindra Satyam -- so rechristened after the company's sale to Tech Mahindra in April last year.

On January seven, 2009, Raju wrote to regulator Sebi stating that he had falsified revenue and profits for many years and created fictitious assets.

He had famously described the fraud, whose size is conservatively estimated at Rs 10,000 crore, as akin to "riding a tiger and not knowing how to get off without being eaten". He was arrested two days later.

One year after, Gurnani is a happy man. He feels the decision to acquire Satyam was well meditated and worked out in favour of the company.

"Satyam is in safe hands now and I can only wish them luck. The aspiration now is to be back in the league of the big five", said Kiran Karnik, who was chairman of Satyam's government-appointed board before its sale to Tech Mahindra.

In the eight months after it was sold, Satyam has undergone massive changes, and all for the good.

Reminiscing the events of the past one year, Karnik said the main challenge was to restore jobs as the future of thousands of young people was at stake. Satyam at that time claimed to have over 56,000 employees on its rolls, although the number was disputed.

The headcount has been rationalised. As against 50,000 last January, the current headcount stands at 30,000. From April, till date about 40 new clients have been added, taking the total client number to over 400.

On the management side too, there have been changes.

"We have formed 12 task forces to look into specific areas, such as task forces looking into branding, governance, finances, legal, growth, R&D, client loss, client wins and others," Gurnani said.

Asked if systems are in place to prevent recurrence of a similar fraud, he said, "Frauds like these cannot be prevented by regulation alone. Checks and balances would have to be formed as part of the system within the company itself."

Besides Raju, the Satyam founder's brother Rama Raju, the company's former CFO Vadlamani Srinivas and two partners of auditor PriceWaterhouse are also in jail.

The company recently appointed Deloitte as auditors and the move came on the heels of the CBI charging PriceWaterhouse with complicity in the mammoth accounting scam.

The scam became the subject of multiple probes by agencies like Corporate Affairs Ministry's Serious Fraud Investigation Office, accounting regulator ICAI and Andhra Pradesh police, besides the CBI.

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First Published: Jan 06 2010 | 5:35 PM IST

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