India’s outsourcing giant guilty of fraud
An Indian court on Thursday 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.
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 140 billion rupees ($2.28 billion).
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 Thursday and sent them to a local prison.
The judge also fined Raju 50 million rupees ($806,000).
The sentencing was planned for Friday, but judge Chakravarthy announced it 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 U.S. 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 $351 million and changed its name to Mahindra Satyam in 2010.