Police arrested B.
Ramalinga Raju, the founder and former chairman of beleaguered outsourcing giant
Satyam Computer, days after he admitted he doctored the company's accounts to the tune of $1 billion.
Satyam's balance sheets were riddled with "fictitious" assets and "non existent" cash that could no longer be concealed after a deal intended to save the struggling company was abandoned, Raju admitted in a letter to the company's board.
Raju and his brother, former managing director B. Rama Raju were arrested in the southern city of Hyderabad, according to S.S. Yadav, the top police official of Andhra Pradesh state where the company is headquartered. Hyderabad is the capital of Andhra Pradesh.
His lust for land seems to have been Ramalinga Raju's undoing.
Hailing from an agricultural family, for whom land was everything, the Satyam chairman went on to create a multi-billion empire in a span of just 20 years. This was a remarkable feat for a first generation entrepreneur but he could not overcome the lure of land. And that that led to the collapse of his empire.
According to his own admission, Maytas Properties, owned by his family, has a land bank of 6,800 acres in Andhra Pradesh. Most of it is concentrated in the state capital and important urban centres such as Visakhpatnam. This included three Special Economic Zones for the IT industry in Hyderabad and a port the company was permitted to develop at Machilipatnam. Satyam's troubles started with its plan to acquire Maytas Properties and the privately held Mytas Infra last month.
Sources said Raju started acquiring land in the late '80s, when the plan for setting up of the exclusive IT district of Cyberabad was envisaged.
Since land is a state subject, a helping hand from the revenue authorities was needed to clinch the deals. So Raju assiduously cultivated successive chief ministers, N Chandrababu Naidu and Y.S. Rajasekhar Reddy. He became a poster boy for Naidu, who started promoting him to anybody and everybody who mattered, including the then US President Bill Clinton and Microsoft boss Bill Gates.
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