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K.V. Kurmanath
M. Somasekhar

Though cliched, the best description for Madhapur, the hub of all IT activity in Andhra Pradesh, would be that it was just a nondescript village a decade ago, where farmers coaxed dry land to life.

Today, name any IT, BPO company worth mentioning, it has presence in Madhapur and the adjoining suburbs. The swanky, aesthetically-built structures sporting modern designs that have sprung up in this area can easily match upmarket areas of any of the top global cities.

Hundreds of companies, small and big, have surfaced on the scene in a short span of time. Some have survived, others have found it tough to keep pace, while some others continue to grow despite the odds.

Madhapur also houses Microsoft, Oracle, CA and Wipro, among IT giants. It also has CMC, ISB, Bank training institutes, IIIT, to name a few reputed organisations.

One company that stood tall and was not just the cynosure of all eyes but also a source of obvious envy was Satyam Computer Services. It earned universal recognition that few could match in the Madhapur area.

In fact, for most people in Andhra Pradesh, over the past decade, Satyam and IT have been virtually synonymous. The same holds good for B Ramalinga Raju, its founder, who emerged as the face of IT in the State.

The take-off point in Ramalinga Raju’s career came in 2002-03, when the then Chief Minister, N. Chandrababu Naidu, chose him to represent the Indian IT industry and make a presentation to the US President, Bill Clinton, who was visiting Hyderabad.

There was no looking back from then on. Satyam won big contracts globally, its operations grew across the country, with several States vying for the company’s presence in their planned IT hubs. Ramalinga Raju was soon catapulted into the Chair of Nasscom.

By now, Ramalinga Raju was well on the way to earning the tag of ‘visionary’. The vision took shape in the form of a galloping Satyam, which logged $1 billion in 2004 and raced to $2 billion in the next four years. It reached the fourth position, behind Infosys, TCS and Wipro Technologies.

Both Chandrababu Naidu and his successor, Dr Y.S. Rajasekhara Reddy, in their attempts to attract FDI and IT companies to Hyderabad on a competitive basis with Bangalore and Noida, projected Satyam and Ramalinga Raju in the same breath as Microsoft and Oracle.

In the course of this journey, Satyam grew from strength to strength, both in technology and manpower. It offered a low-cost, efficient delivery service format, which brought in 185 of the Fortune 500 companies as customers. Its presence in China, Brazil, and Australia opened windows to clients in far-reaching parts of the globe.

Ramalinga Raju diverted his energies to a range of corporate social responsibility (CSR) activities as well, which attracted the attention of both the common man and leaders such as Dr A.P.J. Abdul Kalam, Bill Gates, the World Bank’s Wolfenson, et al. Organisations such as the EMRI, HMRI, Byrraju Foundation and Satyam Foundation sprouted.

The diversified activity generated a lot of employment and gave a ‘larger than life image’ to Ramalinga Raju in the State.

Reliving the days before the scam hit Satyam, a peer who heads an IT company said he has always faced pressure by way of comparison.

“My wife would urge me to emulate Ramalinga Raju,” he said. “I heard parents telling their children to achieve at least 1 per cent of what Raju had achieved,” he added.

That was the power of Ramalinga Raju, err.. before January 7, 2009, when the Satyam success story crumbled.

Ramalinga Raju’s growth in stature, in many ways, represents the progress of the IT industry in Andhra Pradesh.

From a 20-member team in 1987, Satyam grew into a 52,865-employee company (that the figure may be inflated is a different issue) in the last 20 years. The IT sector in the State too started off with a few hundreds at that point. But its potential to generate jobs was put at 2.39 lakh in 2008.

From a turnover of a few lakhs, Satyam reported that it had grown to Rs 11,475 crore (annualised, fudged, needing to be re-audited and restated) in 2009. IT exports from the State, between 1995-96 and 2007-08, grew from Rs 60 crore to Rs 26,122 crore, contributing to 15 per cent of the national exports of Rs 1,77,700 crore.

From visionary to a man his peers cannot now understand, the image of Ramalinga Raju has changed almost overnight.

The maze of transactions involving Maytas Properties and Maytas Infra is yet to be unravelled fully.

With Ramalinga Raju’s personal standing going down, there are concerns that India’s credibility as an offshoring centre too could be affected.

The Government of India, meanwhile, has stepped in to stem the damage and restore both the company’s and the country’s image.

Meanwhile, Madhapur, which was on the way to becoming as representative of Hyderabad as the historical Charminar, now seems to have lost some sheen.

“When I was in college, he was the idol for me. Two years later, Ramalinga Raju is a big disappointment,” says tech youngster Sarat, who is yet to receive his first salary.

The Satyam saga reads like a Jeffrey Archer novel. The protagonist strikes when the IT opportunity is hot, and steers his club into the select group of the top five technology firms in India.

But the other side of the story too was unfolding alongside, with Ramalinga Raju reducing his stake in the company to almost naught. As he dreamed his own dreams, the shareholders of Satyam dreamed their own. They had been expecting a share in the piling up reserves. But that was not to be.

The unravelling began on December 16, wherein he sought to use all the cash reserves to buy Maytas Properties and Maytas Infra. But he was forced to abandon this following protests from investors and analysts. The Satyam scrip was pushed into turmoil and the Sensex was left reeling. As this plan fell through, Ramalinga Raju said he would go for a correction course. This too was not to be. On January 7, he shocked the corporate world by admitting to a Rs 7,136-crore fraud.

With each passing day, new stories are hitting the headlines about Satyam.

The role of independent directors, auditors, top Satyam leadership, Registrar of Companies and economic intelligence – all have come in for questioning.

It looks like there is no full stop to the story, for now! For their part, Satyamites are keeping their fingers crossed as six to nine companies have reportedly evinced interest in buying the company.

Will Ramalinga Raju leave a permanent scar on the Indian tech landscape? Where does the man himself go from here? Only time holds the answers.

kurmanath@thehindu.co.in

More Stories on : Economic Offences | Insight | Satyam Computer Services Ltd

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