Background
The IT boom in India, was fueled by young, Middle class and Educated, budding Indian Entrepreneurs and Western firms anxious to outsource to take advantage of high-skill, low-wage workers. This trend created a new breed of businessmen for the 21st century and generated many fortunes literally overnight. Ramalinga Raju- founder and former chairman of Indian IT giant Satyam Computer Services- was one of these new millionaires. The son of a farmer from a middle-class family with an American MBA degree and a 1999 Ernst & Young entrepreneur, Raju started Satyam and worked his way to make the company a top 5 Indian IT firm with clients in 60 countries. Satyam was listed on the New York Stock Exchange (NYSE) and the Bombay Stock Exchange. Along the way Raju picked up CNBC's Asian Business leader - Corporate Citizen Award and 1,000 designer suits, 321 pairs of shoes, 310 belts. The Capitalization of Satyam skyrocketed to $9-billion. It consequently crashed by 78% when Raju confessed in January that he had falsified accounts for 6-years and inflated the cash account by over $1-billion. But after the crisis, the Government started managing Satyam through a new Board. Satyam had fictitious names that diverted $4-million monthly towards the Raju's "personal wealth" by inflating the number of Employees of the company from 40,000 to 53,000; hundreds of acres of land were bought using phony accounts; certificates from HDFC Bank confirming deposits were false.
Read more about this topic: Satyam Scandal
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