India's fraud office will file charges this month against the founder of outsourcer Satyam after he admitted to falsifying profits in the nation's biggest corporate fraud, a minister said Monday. Satyam's founder B. Ramalinga Raju stunned India's financial world in January when he declared he had overstated profits for years and inflated the company's balance sheet by over one billion dollars.
"During this month, it (the Serious Fraud Investigation Office) will begin prosecution" proceedings, Corporate Affairs Minister Salman Khurshid told reporters in the Indian capital New Delhi. The fraud office will prosecute Raju and others under "those areas of company law that it is expected to and has been authorised to proceed with," Kurshid said. The Serious Fraud Investigation Office was expected also to prosecute Raju's brother Rama Raju, who was Satyam's former managing director, Vadlamani Srinivas, the ex-chief financial officer, and Price Waterhouse auditors S. Gopalakrishnan and Srinivas Talluri.
All of the men were placed in custody after the scandal broke at the start of the year embroiling Satyam, a celebrated symbol of India's global outsourcing prowess. In April, mid-sized Indian computer outsourcer Tech Mahindra, part of leading Indian vehicle maker Mahindra and Mahindra, paid nearly 600 million dollars for a majority share in the company, rescuing it from collapse. Satyam was ranked as India's fourth-largest outsourcer by revenues when the scandal broke and its clients included some of the world's biggest companies such as Nestle, General Electric and General Motors.