The conviction of Ramalinga Raju and Co. brings to an end a sordid chapter in Indian corporate history.

The Satyam case was not just a accounting scandal but a systematic subversion of systems and processes designed to fool investors into believing that Satyam was one of the top players in the IT industry when the reality was very different. Thus, the Special Court has held Raju and the others, including auditors from PriceWaterhouse, guilty under various sections that relate to criminal conspiracy and cheating, criminal breach of trust, forgery, destruction of evidence and even impersonation.

Fake invoices, false bank statements, fictitious clients, forged FD receipts… Raju and his team were at it and in various ways for many years beginning 2001 till it all exploded in the face of investors who had bought into the false story.

Not just this. Ramalinga Raju, his brother Rama Raju and their family members had enriched themselves unfairly by trading in the company’s shares with the benefit of inside information.

According to SEBI, the brothers got richer by ₹543.93 crore from unlawful sale of Satyam shares and by ₹1,258.88 crore from pledging their holdings when the share price was at its peak. And these transactions were done with the benefit of unpublished price sensitive information they were privy to.

The seven-year jail term is the maximum that can be handed out under the law but the fine of ₹5 crore appears just a token gesture given the size of the financial fraud. Investors who lost heavily when the Satyam share plunged to ₹41.05 from ₹178.95 the day before the scam broke are bound to be disappointed at the relatively small financial penalty handed out.

Raju has already spent a little over two years in jail. He will now knock on the doors of the higher judiciary to try and overturn the Special Court judgment. We may not have heard the last of the Satyam case.

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