Fortune finally smiled today on B Ramalinga Raju, founder of what was earlier known as Satyam Computer Services, with the Supreme Court granting him bail. The lawyers of Raju, who has been in jail for over three years for a massive accounting fraud at the software company, are now busy preparing the personal bonds required to be furnished in the court to secure his release.
The apex court also granted bail to Raju’s brother, B Rama Raju, and the company’s former chief financial officer, Srinivas Vadlamani, on the condition that they should furnish a personal bond of Rs 2 lakh each, with two sureties of same amount. The lawyers of the trio here are trying to furnish the bonds before 5 pm tomorrow in the trial court.
With today’s bail orders, all the 10 charged in what is considered the biggest corporate fraud case in the country till date would be out of jail. While five were granted bail by the apex court on October 12, two others were given bail by different courts earlier.
The charges are under sections 120 (criminal conspiracy), 409 (criminal breach of trust), 420 (cheating), 467 (forgery of valuable security), 468 (forgery), 471 (forgery for cheating), 471A (falsification of records) and 201 (causing disappearance of evidence) of the Indian Penal Code.
Ramalinga Raju and his brother were arrested on January 9, 2009. and Vadlamani the following day. Auditing agency Price Waterhouse’s S Gopalakrishnan and Srinivas Talluri were arrested on January 24, 2009. All of them were in the Chanchalguda Central Prison here.
Since his arrest 34 months earlier, Raju has been in jail, except for two months. He was being treated in hospital for a month and was out on bail for another month. His bail plea had been rejected by various courts before the Andhra Pradesh high court granted him bail in September last year. However, the Supreme Court cancelled the bail, following a petition filed by the Central Bureau Investigation (CBI), which is probing the fraud case. The apex court said Raju could again apply for bail if the trial in his case was not completed by July 31, 2011.
Background
The countdown for Satyam and its founder began on December 16, 2008, when the software firm announced its intent to acquire a 51 per cent stake in Maytas Infra Ltd and a 100 per cent stake in Maytas Properties, promoted by Raju's sons, Teja Raju and Rama Raju, for around $1.6 billion. The was severely opposed by other investors in the company, forcing Raju to call off the proposed acquisition within a day of the announcement, on December 17, 2008.
"In light of the setback received from the investors community, we have been surprised by the market reaction to this decision, even though we were quite positive about the merits of the acquisition. However, in deference to the views expressed by many investors, we have decided to call off these acquisitions," Raju had said.
Then, on January 7, 2009, Raju resigned from the Satyam board after saying he had been falsifying the earnings and assets of Satyam for years. His letter to the board said he tried to sell the two promoter-related firms to Satyam in a final attempt to plug Rs 5,500 crore of “fictitious” cash on the company’s balance sheet. Profits had been “inflated for several years”, Raju said.
Of Satyam’s reported cash and bank balances of Rs 5,361 crore on September 30, 2008, as much as Rs 5,004 crore was non-existent, Raju said in the letter. The operating margin for the quarter ended September 30 was three per cent of revenue, instead of the reported 24 per cent, he said. The company’s annual revenue was Rs 2,100 crore, 22 per cent less than the inflated figure of Rs 2,700 crore that had been reported. Raju arranged Rs 1,230 crore “to keep operations going” at Satyam by pledging the founders’ shares and raising funds from other sources.
“What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years,” Raju said in his letter. “It was like riding a tiger, not knowing how to get off without being eaten.” The letter said he was “submitting himself to the laws of the land and the consequences thereof”.
Two days after shocking confession, Raju and his brother and managing director, Rama Raju, were arrested as part of a crackdown by state authorities and the central government, which disbanded the tainted IT firm's board.
After keeping 50,000-odd employees and numerous investors biting their nails, the beleaguered company finally found a new owner on April 14, 2009. Tech Mahindra pipped Larsen and Toubro and Wilbur Ross to the post, with the government-appointed board of directors selecting Venturbay Consultants Pvt Ltd, a subsidiary controlled by Tech Mahindra, as the highest bidder to acquire a controlling stake in the IT services company.
-----------------
STRESSFUL TIMES
2008
December 16: Satyam's board approved acquisition of Maytas Infra and Maytas Properties for $1.6 billion.
December 17: Decision called off due to stiff opposition from investors.
December 18: British mobile solutions provider Upaid files a lawsuit against Satyam in the USA.
2009
Jan 7: B Ramalinga Raju confesses to account fraud.
Jan 9: Andhra Pradesh CID starts investigation. Raju and brother B Rama Raju arrested.
Jan 10: Raju and Rama Raju sent to judicial custody for 14 days. CID arrests Satyam's former CFO, Srinivas Vadlamani.
Jan 12: Vadlamani confesses that fixed deposits were unreal and fictitious.
Jan 16: Court denies first bail plea of Raju.
Jan 24: Price Waterhouse auditors, S Gopalakrishnan and Srinivas Talluri, arrested by CID.
Feb 16: Government orders Central Bureau of Investigation to probe fraud.
April 6: Enforcement Directorate registers case against Satyam and Raju for alleged money laundering.
April 7: CBI files chargesheet against Raju brothers, Vadlamani, PW auditors, company's vice president (finance) G Ramakrishna and two other employees, Venkatapathy Raju and C Srisailam.
May 13: Bail plea of Raju dismissed again.
2010
February 17: Special court on Satyam becomes functional
February 19: High Court again rejects bail plea of Raju
March 5: Court directs NIMS to file report on Raju's health
March 11: Raju moves Supreme Court against AP high court order rejecting his bail application
March 15: Supreme Court denies bail to Raju on the ground that he may influence the witnesses
April 23: CBI seeks court's permission to question Raju through video conferencing
July 12: Raju gives consent for his examination through questionnaire.
July 20: HC grants bail to Rama Raju, four others in Satyam case.
July 28: Ramalinga Raju files petition in High Court seeking bail.
August 18: Raju gets conditional bail.
October 10: Raju's bail was cancelled by Supreme Court.
