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January 7, 2009 8:21 pm

Business hero who crashed and burned

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Less than a month ago, B Ramalinga Raju, founder of Satyam Computer Services, was a regular fixture at India’s most prestigious corporate events.

The man who on Wednesday admitted to falsifying his company’s books to the tune of more than $1bn, in 2007 won the Ernst & Young Entrepreneur of the Year award for building his information technology group into an enterprise employing more than 50,000 people.

Last November, he co-chaired the World Economic Forum summit in New Delhi, appearing on almost every panel and talking of the need for a paradigm change on how the outsourcing industry is run.

Considered one of the pioneers of the Indian information technology boom, Mr Raju had been hailed by many in India and abroad as a business visionary as his company posted profits’ growth of about 20 per cent annually.

“Satyam is an incredibly innovative company. Mr Raju has used the spirit of entrepreneurship not [only] to meet and exceed analyst expectations in every venture they undertake but [also] to make a big difference to the lives of millions of people living in India and its villages,” said K.V. Kamath, chief executive of ICICI Bank, India’s biggest private bank, at the Ernst & Young awards.

A member of an influential farming and land-owning caste in the southern state of Andhra Pradesh – Raju means ‘king’ in Telugu, the regional language – Mr Raju did not follow in his ancestors’ footsteps.

While his family made its fortune in agriculture during India’s “Green Revolution”, he broke away and went to study in the US.

He graduated with an MBA from Ohio University in the late 1970s, then returned to India and worked in the real estate and infrastructure sector.

Ten years later, Mr Raju founded Satyam, along with one of his brothers-in-law. The company had only 20 employees.

The group quickly established itself as a big player in the international IT software outsourcing services business.

Its internet service company, Sify, was one of the first to enter the Indian market in the 1990s and its outsourcing services operation became the back office of important clients in Europe and the US, including General Electric and the US defence force.

The rise of Satyam helped to turn Hyderabad, capital of Andhra Pradesh, into one of India’s new IT cities.

At the WEF in Delhi, he told the Financial Times that he was proud of his company’s performance during the global economic crisis. He added that he was confident that he would lead Satyam through the turbulent times to grow bigger and stronger.

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