Millennium Post

Let off lightly?

For a company which was ironically named Satyam, there was not a lot of truth-telling that the company or its erstwhile founder B.Ramalinga Raju did. On 7 January 2009; no longer able to keep a monstrous lie hidden in his cupboards; Raju wrote a meandering, seemingly contrite letter to the companies board which began something like this” It is with deep regret, and a tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice”.

The understated tone of the letter betrays the depth and impact of the scam he was about to reveal. Raju admitted to cooking the books of the company and as a result one of India’s biggest corporate scams surfaced from the deep, murky sea of lies Raju had hidden it in.

This fudging of accounts, the Central Bureau of Investigation(CBI) had estimated, had caused a loss of nearly Rs.14,000 crore to Satyam shareholders. Conservative estimates peg the scam at half of that: 7,000 crores. Whatever the figure might actually be, there is no doubt that Raju was the brain behind one of India’s biggest corporate scams. The scam was especially detrimental to investor confidence given that it came at a time when the global economy was going through its worst slump in years.

Today a special court on Thursday sentenced Raju, and nine others to seven years of rigorous imprisonment after convicting them in India’s biggest case of corporate fraud.

Once the blue-eyed boy of the Indian outsourcing industry, Raju’s fall was faster than the greek mythological figure Icarus. Icarus ignored his father’s instructions not to fly too close to the sun, whereupon the wax in his wings melted and he fell into the sea. This mythological parable is telling because like Icarus Raju displayed a similar admixture of hubris, lack of awareness and recklessness. Except that in Raju’s case, unlike Icarus, his actions ended up affecting thousands of Satyam employee and dented the confidence of a corporate sector which was already huffing and puffing in order to survive the recession.

For many who were outraged when the scam took place, this lenient sentence of 7 years comes across as too little, too late. Fraud on such scale has not received such lenient sentences globally. Bernie Madoff’s case is telling in this regard. On June 29, 2009, close on the heels of the Satyam scam being revealed in India, Madoff was sentenced to 150 years in prison by a United States court, the maximum allowed.

“Here the message must be sent that Mr. Madoff’s crimes were extraordinarily evil and that this kind of manipulation of the system is not just a bloodless crime that takes place on paper, but one instead that takes a staggering toll” U.S. District Judge Denny Chin had said while announcing the sentence. Does Ramalinga Raju merit more than 7 years in jail? It’s a good question which can only be answered in the coming years; given how slowly our judicial system works.
Next Story
Share it