Indian corporate mogul convicted in largest fraud case

Investigators say the ten officials including the founder of Satyam Computer Services cost shareholders over $2bn.

Rama Raju, his two brothers and seven other officials used forged documents and falsified accounts, the judge said [AFP]

An Indian court has sentenced the founder of an outsourcing giant and nine others to seven years in prison each, after convicting them of stealing millions of dollars in one of the largest frauds in the country’s corporate history.

On Thursday, Judge B.V.L.N. Chakravarthy also found Rama Raju, his two brothers and seven other officials of Satyam Computer Services guilty of cheating, using forged documents, falsifying accounts and breach of trust.

Federal investigators said the fraud by Raju and the others cost the company’s shareholders $2.28bn.

Raju and other suspects were arrested in 2009 but released on bail while they awaited trial. Police took all the 10 convicts into custody after the verdict on Thursday and sent them to a local prison.

The judge also fined Raju $806,000.

The sentencing was planned for Friday, but Judge Chakravarthy announced it on Thursday at the request of the prosecutors.

Satyam, which means “truth” in Sanskrit, was once India’s fourth-largest software services company, counting a third of Fortune 500 companies and the US government among its clients.

It plunged into turmoil after Raju confessed in 2009 that he vastly inflated the company’s assets by exaggerating cash balances, booking fake interest, and misstating both debt and liabilities.

Tech Mahindra, a unit of the Mahindra Group, bought a majority stake in the company for $351m and changed its name to Mahindra Satyam in 2010.

Source: AP