The Rise and Fall of Ramalinga Raju

Industry insiders were of the view that Satyam's growth was not matching up to that of the top three companies in the Indian IT industry, namely, Tata Consultancy Services Limited (TCS),⁶ Infosys Technologies Limited (Infosys)⁷, and Wipro Technologies (Wipro)⁸. At the same time, analysts warned that if Satyam did not keep up its growth momentum, it could lose its coveted position to multinational companies like IBM or Accenture that had ventured into India, or to home-grown companies like HCL Technologies. Analysts blamed the slowdown at Satyam on Raju shifting his focus to his family promoted real estate businesses – Maytas Properties Pvt. Ltd (Maytas Properties) and Maytas Infrastructure Limited (Maytas Infra). Raju faced severe criticism in mid-December 2008, when Satyam made its intentions of acquiring the two Maytas companies public.

Raju's revelation shocked not only investors, employees, and clients of Satyam but also corporate India as a whole. The repercussions of the fraud were felt not only by the Indian IT industry but also by overseas investors who had invested heavily in the American Depository Receipts (ADRs)⁹ issues of major Indian IT companies including Satyam.

India's image as a global outsourcing hub was also badly affected. The international media was taken aback by Raju's shocking revelation. Commenting on Raju, Forbes, in its January 2009 issue wrote, "It was a horrifying turn for a man long considered one of India's self-made success stories – and active philanthropists"¹⁰...