Ramalinga Raju case and the lessons for India Inc

"The case only tells us that a corporate leader must never forget to look in the mirror and keep introspecting himself or herself", says an industry leader.

Ramalinga Raju case and the lessons for India Inc Ramalinga Raju case and the lessons for India Inc

E Kumar Sharma, associate editor, Business Today
March 9, 2015, could well go down as an important date for India Inc. The much awaited court judgement in the alleged multi-crore accounting fraud involving B. Ramalinga Raju, the founder and chairman of erstwhile Satyam Computer Services, his brother B. Rama Raju and others may finally be pronounced today.

Whatever the verdict, this case - running for a little over five years before the special court in Hyderabad - holds huge lessons for India Inc.

This is evident from some of the voices from the corporate world a day before the likely verdict. "The case only tells us that a corporate leader must never forget to look in the mirror and keep introspecting and questioning himself or herself on his or her conduct all the time...must never forget his or her key purpose and role towards all stakeholders," says an industry leader.

Whether Raju is pronounced guilty or not in this voluminous case filed by the Central Bureau of Investigation (CBI), the key learning, says another leader, is to ensure a business leader never lets a situation arise where questions can be raised about his or her conduct. The easiest way out, he says, is by never letting greed drive his or her actions.

Also, the case highlights a point that it is not enough to have a bright mind and to be seen to be doing good things. Raju for instance, set up a unique medical emergency ambulance service - the dial 108 service. It is now run by the GVK group.

He also set up HMRI, which started off by offering mobile healthcare services. It is now backed and controlled by the Ajay Piramal group, and is called Piramal Swasthya.

Without going into the merits or demerits of this case, which is for the court to decide, some corporate leaders clearly feel any sign of moral or ethical drift, even if perceived, can have huge implications for the business, its leaders and employees.

The solution, therefore again, is on learning to keep looking in the mirror and keep asking: "What am I? What should I do? Am I doing the right things?"

All these, industry experts feel, should be routine questions that a business leader must raise to ensure that over-confidence and arrogance do not surface and the person remains grounded about what is in the best interest of all his or her stakeholders.

For the moment, all eyes are on the verdict that the court of XXI Chief Metropolitan Magistrate at Nampally in Hyderabad may pronounce on Monday.

On December 23 2014, Judge B.V.L.N. Chakravarthi cited the voluminous documents in the case as the reason for deferring an order on the matter till March 9.

According to lawyers involved in the case, more than 3,000 documents running into anything between 50,000 and 1,00,000 pages, and 226 witnesses were examined.

Earlier, on December 8, the Economic Offences court in Hyderabad sentenced Raju, his brother Rama Raju and eight others to six months of imprisonment and a fine of Rs 5 lakh.

This case was filed by the Serious Fraud Investigation Office in 2009. The Satyam accounting case came to light on January 7, 2009, when Raju sent out a letter to the company's board members admitting that the books of the company had been cooked.

A couple of days after he sent the letter, Raju was arrested by the Andhra Pradesh Criminal Investigation Department. The Central Bureau of Investigation subsequently took up the matter and filed three charge sheets against the 10 accused.

Three months after Raju's letter, the Mahindra Group acquired Satyam Computer and gave it a new identity - Mahindra Satyam. On June 25 2013, Mahindra Satyam was merged with Tech Mahindra and is today a $3.5-billion entity.

The judgement date was deferred to April 9 after this article went live. However, the underlying issues and lessons for the industry remain the same.