This is the size of the stupendous personal wealth garnered by former satyam chairman. Though sentenced to seven years jail for embezzlement, it’s not likely to make a dent in his fortunes
By Shantanu Guha Ray
Featured image: Ramalinga Raju (center) returns to Chanchalguda prison in Hyderabad on January 23, 2009. He was remanded to judicial custody till January 31
A few hours after he was taken to prison, Ramalinga Raju, disgraced IT-czar, asked a bizarre question to the jailor of Hyderabad’s Cherlapalli Central Prison: “Can I address the prisoners, at least those who are interes- ted?” The jailor was flummoxed. He refused the request, arguing that there were no such provisions in the jail manual.
Raju, and those who went to jail with him, argued that the former Satyam promoter was raising the issue for a particular reason: He wanted to apologize to the people of Hyderabad for his deeds, an act he had planned to do sometime this January, but failed because a proposed advertising campaign did not work.
Raju, not to be outdone, told the jailor that it would be good if the jailor himself could tell prisoners that Raju was a god-fearing person and not a land shark. “It seemed he wanted to clear some doubts about his penchant for land. Raju wanted to tell everyone he was a clean man gone astray,” a person privy to the discussion said in a telephonic interview from Hyderabad.
The conversation rang a bell.
LAND CZAR
It was in December that a senior CBI officer went through a tome the agency had prepared during its high-profile case against Satyam’s disgraced promoter, Ramalinga Raju. The estimate of Raju’s personal wealth was a whopping 9,000 acres, almost comparable to the area between Rajghat, in Delhi, and IFFCO roundabout, in Gurgaon.
Raju, the CBI official told his superior, was passionate about acquiring copious amounts of real estate across Hyderabad, stretching all over the suburbs of the ancient Charminar city.
Last week, as a court in Hyderabad sentenced Raju, once considered a part of India’s information technology trinity along with NR Narayana Murthy and Azim Premji, to seven years prison for a Rs. 4,000-crore scam, it is reliably learnt that he asked his confidants to secure whatever they could of his real estate empire. This, incidentally, stretched across Hyderabad, Bengaluru, Chennai and Nagpur.
Raju, claimed sources in Hyderabad, knew he would not have much luck in tracking the land once he was lodged in Cherlapalli Central Prison as prisoner number 4148. A newspaper in Kolkata cryptically termed the start of
the seven-year-long jail period as “Satyam Seven Sundaram”.
MEDIEVAL KING
Raju’s downfall began in January 2009 when he confessed to inflating his account books, admitting that he was keen to expand into real estate too. He admitted how land was at the center of the Hyderabad Metro Rail project that he had bid successfully.
“Like medieval kings, Raju loved lording over land, land and more land,” quips his biographer, Kingshuk Nag. The veteran journalist said it was clear to many in Hyderabad that though Satyam got Raju the prestige and standing he desired, he personally was “very focused on his real estate company, Maytas (the word coined after hand-picking alphabets of Satyam in reverse). He formed Maytas in 1988, a year after Satyam was formed.”
But there was a problem. Raju and his men went down like the proverbial Humpty Dumpty in the wake of the global meltdown that reduced the value of his landholdings, leaving him with a cashless chest. There were rumors that he—like many in India—had used cash from politicians to invest in real estate and was struggling because prices had crashed. Worse, the politicians—with the 2009 elections around the corner—asked for cash and Raju had none. The sparks then started flying, thick and high.
And then, like the iconic South African skipper Hansie Cronje who woke up at midnight and decided to confess everything about match-fixing to a priest the next morning, Raju spilled the beans. In a flash, India’s IT poster boy was considered untouchable by many. Countless questions were also raised about the way the Indian arm of global accounting firm, PriceWaterhouse Coopers, conducted audit of Satyam’s books.
Raju, who often said he was inspired by the legendary Dhirubhai Ambani’s textile success and even started a spinning mill, confessed to investigators about how he and his men cooked up account books by bribing auditors. The CBI, which handled the probe, also tracked how Raju had earlier failed in business, such as grape farms and hotels, after returning from Ohio in 1977 with a management degree.
“The poster (Raju as one of the IT-trinity) crumpled overnight,” said N Reddy, a CID officer in Hyderabad who worked very closely on the case with CBI officers.
FALL from grace?
(Top) Ramalinga Raju was once considered a part of India’s information technology trinity along with NR Narayana Murthy and Azim Premji (Below)
Raju, who launched Satyam Computers in April 1987 on the advice of DVS Raju, an electronics engineer who studied with him in Ohio, eventually called DVS from the United States. Under him, in 1992, Raju pioneered an offshore business of Indians writing software solutions. US Tractor giant John Deere signed first, and the rest followed. Raju, by then, had got a hang of the business, and got rid of DVS, currently promoter-owner of Visakhapatnam’s Gangavaram Port.
“That was the first sign of troubled times in Satyam,” says Reddy. Raju, he adds, knew nothing about IT and various other aspects of this business. To replace DVS, he brought his brother-in-law, Srini Raju, an engineer from Texas Instruments, who pushed Satyam into the Y2K and ISP business. Subsidiaries spawned, Satyam Infoway got listed on NASDAQ to trade at double its face value on the first day and there was an ADR (American depositary receipt).
“See his game plan. Raju got rid of Srini and took charge of the company with brother Rama,” says Reddy. Raju was on a high, his scrips were loved by many, but fancied by the Big Bull, Ketan Parekh. And Satyam was in
K-10 scrips.
IN THE BIG LEAGUE
This pushed the price of Satyam scrips and Raju offloaded the promoter’s shares and used them as collaterals to borrow from banks. And he bought land across India. Satyam Infoway bought some e-sites at inflated cash and Raju got a portion of it as kickbacks.
Raju was truly in the big league now. The then chief minister of Andhra Pradesh Chandrababu Naidu called him the mascot of rising Hyderabad and asked him to share the dais with US president Bill Clinton who had come visiting.
And then, Raju realized he had run up against the wall. His accountants said that from a position of 80 percent promoter’s shares, Raju ended with zero shareholding. Raju gave in.
The scam started in 2000 and ended with the disclosure by Raju on January 7, 2009, about how about one-and-a-half crore shares of Satyam were sold by him and his partners.
“Srini Raju and his firm had sold away 73 lakh Satyam shares and made huge money during the scam period. Srini’s father, Anji Raju (now deceased) also sold away 2.5 lakh Satyam shares during the scam period.
In all, Raju and company made Rs. 2,000 crore through the sale of shares,” says the charge-sheet filed by Securities and Exchange Board of India (SEBI).
STILL IN BUSINESS
But does that mean all is over, now that a conviction and sentencing has happened? Many in Hyderabad answer—strangely—in the negative. Raju is down, but not out. He may be in jail, but his family is far from being out of business.
So what’s cooking? Since 2011, Raju—citing heart ailments—stayed mostly at home, but actively encouraged family members to dabble in real estate. His 20 percent stake is intact in Maytas Properties (now sold off to IL&FS) and Raju owns another land bank in Hyderabad’s Medchal area where current prices hover bet-ween Rs. 50,000 and Rs. 60,000 per square yard. The project is on hold since 2009 and the man taking care of the land bank is Raju’s aide, KSS Prasad Raju.
The then CM of Andhra Pradesh Chandrababu Naidu had asked Raju to share the dais with US president Bill Clinton who had come visiting
This is not all. Raju, who had funded the creation of the Emergency Management and Research Institute (EMRI) that was handed over to GVK, now runs a medical service provider (CallHealth Services), a top-rated company employing over 500 employees, and which received a `100-crore investment in 2013. Several aides of Raju, who once helped him run EMRI, are now working at CallHealth. Among them is Sudhakar Nukala, former EMRI CEO and currently COO of CallHealth.
The Raju story could be far from over yet, especially when he is having routine meetings in his cell in the jail.