Ramalinga Raju, Chairman, Satyam Computers, was one of the well respected Indian corporate honcho across the globe when his firm, one of the top five flagship Indian IT giants, was at its peak of glory. The company even had received a Golden Peacock Award for Excellence in Corporate Governance. But Raju’s botched attempt to buy two infrastructure firms in which the company's management held stakes caused serious concern about conflict of interests and a lack of transparency. His ultimate confession about ‘cooked up balance sheets’ shattered the aura of top business leader around him and brought immeasurable ignominy to him and the company. Raju admitted to a Rs. 4,000 crore ($823 million) fraud, the largest in the history of corporate India, and resigned from his CEO position and Ram Mynampati was appointed as interim chief executive. Now, Raju and his brother Rama Raju are in jail, facing various charges including forgery. The prestigious Golden Peacock award has also been taken back.

Satyam struck misfortune when it planned to take over the group companies Maytas Infra and Matyas Properties, in which Raju and his brothers and associates own 35 and 36 percent of stakes respectively, at $1.6 billion. But the shareholders' revolt forced the Rajus to abandon the proposed plan within few days. The second blow the company received was a shocker from World Bank. The bank banned Satyam from doing any of its projects for next eight years. The decision came after Satyam was caught for Computer Security Compromisation and bribing bank officials. The unfortunate incidents triggered off a spate of resignations beginning with Mangalam Srinivasan, Fellow of Harvard University, whose exit was quickly followed by three Independent Directors M Rammohan Rao, Dean ISB, and Vinod K. Dham, and Executive Managing Director of NEA-Indo U.S. Ventures and Non-executive Director Krishna G. Palepu, Senior Associate Dean for International Development, all members of the nine-member board. That’s how the brutal saga of Satyam’s disgrace began.

The Calamitous Confession

“I sincerely apologize to all Satyamites and stakeholders, who have made Satyam a special organization, for the current situation. I am now prepared to subject myself to the laws of the land and face consequences thereof,” Ramalinga Raju said in a notice sent to the stock exchanges on January 7. He said that the software services firm had fraudulently incorporated a non-existent cash component and inflated the bank balance to reflect Rs.5,040 crore ($1.04 billion) as against Rs.5,361 crore ($1.1 billion). Shares of Satyam tanked by over 80 percent following Raju’s confession. The BSE reacted by de-listing the scam tainted company with effect from Jan 12. Dow Jones Indexes, a leading global index provider, has removed the scandal-hit Satyam Computers from its 'Dow Jones India Titans 30 Index'.

There were all the signs of the collapse of the giant. However, in a move to resurrect the sinking ship, Indian government sacked the existing board of Satyam and announced a new three member board comprising of Deepak Parekh, the chairman of HDFC Bank, Kiran Karnik, a former head of the Nasscom, and C. Achuthan, a lawyer and former head of the Securities and Exchange Board of India, the Indian stock market regulator. Eventually the government expanded the three member board to six, to include S Balakrishnan of the Life Insurance Corporation, Tarun Das, chief mentor of the Confederation of Indian Industry, and T N Manoharan, former president of the Institute of Chartered Accountants of India.