Geography Reference
In-Depth Information
Satyam, which means 'truth' in Sanskrit, was controlled by the family of its then
chairman, Ramalinga Raju, 61 who was closely linked with various politicians, including
Chandrababu Naidu and YSR. Raju inherited a family textiles business and then moved in-
to construction. In 1987, he set up Satyam, which became one of the first to use India's low-
cost software engineers to work at home and abroad for US and other companies. Satyam
expanded rapidly as a market leader in the 1990s software boom, and in 1998 launched
Satyam Infoway (Sify), one of India's first private sector internet service providers that was
also the first to be floated on the US stock market (and was later sold to private equity
firms).
The Rajus' infrastructure company, Maytas, received favours on contracts from the state
government including YSR's Jalayagnam projects, and eventually drained funds out of
Satyam for real estate speculation. This business tainted Raju's and his companies' reputa-
tions. Questions were being asked by potential investors in the early 2000s about his busi-
ness ethics, with allegations of tax evasion and over-pricing in a 1999 takeover of Indi-
aWorld.com , an Internet portal. In 2001, a stock market official told me that he did not ex-
pect Sify's membership of the American NASDAQ stock exchange would stop Ramalinga
'falsifying its subscriber base figures in order to boost its share price'.
The reports and allegations of unethical operations tended to disappear without any legal
action, and official inquiries came to nothing. In the over-hyped investor enthusiasm of the
time, these worries were mostly overlooked, and were partially allayed in the early 2000s
by assurances that Raju was improving the company's governance with new board mem-
bers. Rumours continued to circulate in the following years, but Raju emerged in 2006 from
his relatively low-key life to become chairman of NASSCOM, the software industry's na-
tional trade body, which boosted his and Satyam's image.
With hindsight, it can be seen that Raju's crony business practices were revealed publicly
when YSR's government was heavily criticized in September 2008 for awarding a Hydera-
bad metro railway contract to Maytas. 62 E. Sreedharan, who built and ran the Delhi Metro
and is regarded as an international expert, alleged that there was a possible land scam on
the proposed public-private-partnership project that Maytas had secured on a build-operate-
transfer (BOT) basis from YSR's government. In a letter to Montek Singh Ahluwalia,
deputy chairman of the Planning Commission, Sreedharan cautioned against using BOT
deals, which Ahluwalia favoured, for building such railways. 63 Sreedharan alleged that
Maytas 'has a hidden agenda which appears to be to extend the metro network to a large
tract of his private land holdings so as to reap a windfall profit of four to five times the
land price'. Sreedharan's views, however, were swept aside by the YSR government which,
unsuccessfully, demanded an apology from him and threatened legal action. (The Maytas
contract was cancelled in July 2009 and the project was awarded a year later to L&T.)
Search WWH ::




Custom Search