02:17 - Source: CNN
10 convicted in India corporate scandal

Story highlights

Satyam Computers Services was at the center of a massive $1.6 billion fraud case in 2009

The software services exporter's chairman, Ramalinga Raju, admitted inflating profits

Satyam had been India's fourth-largest software services provider

New Delhi CNN —  

An Indian software pioneer and nine others have been sentenced to seven years in jail for their role in what has been dubbed India’s biggest corporate scandal in memory, police said.

Ramalinga Raju, the former chairman of software services exporter Satyam Computers Services, was also fined $804,000, R.K. Gaur, a spokesman for India’s Central Bureau of Investigation, told CNN.

In 2009, Satyam Computers Services was at the center of a massive $1.6 billion fraud case after its then-chairman Raju admitted inflating profits with fictitious assets and nonexistent cash.

Investigators say losses to investors resulting from the company’s book manipulation were much higher.

A special court convicted Raju and nine other people of cheating, criminal conspiracy, breach of public trust and other charges, said the Central Bureau of Investigation, which looked into the case. In the media, the case has been compared to the 2001 Enron Corp. scandal, in which a Houston energy company’s earnings had been overstated by several hundred million dollars.

When the scam made headlines, Satyam, which means “truth” in Sanskrit, was India’s fourth-largest software services provider.

It was serving almost 700 companies, including 185 Fortune 500 companies, and generated more than half of its revenue from the United States. The company had about 53,000 employees and operated in 65 countries.

After Raju’s shock disclosures six years ago, the Indian government fired Satyam’s board. In a subsequent state-backed auction, the company was bought by Tech Mahindra, part of the country’s Mahindra Group.

A heavyweight of the nation’s software industry, Raju, 60, has been in jail for the past 32 months.

He had founded Satyam in 1987. His company made giant strides as the outsourcing business grew in India in the 1990s.