Satyam Accounting Fraud: Timeline, Impact, and Legacy in India

Telangana High Court sets aside the tax department’s refusal to recompute Satyam’s income Regulators, auditors and tax

In Satyam Computer Services Ltd. v. Central Board of Direct Taxes, a bench of Justices P. Sam Koshy and N. Tukaramji allowed Satyam’s writ petitions against the CBDT’s 11 July 2011 rejection of its request to recompute income for assessment years 2003-04 to 2008-09, because that income included fictitious sales and interest (Indian Kanoon). The court declared the assessment orders for those years void, directed fresh assessments based on revised financial statements for the year to 31 March 2009, and barred recovery until the recomputation is done. It preserved the Revenue’s right to start proceedings afterwards.

Correction to the draft brief: the court is the Telangana High Court at Hyderabad, not the Andhra Pradesh High Court. AiTimeline did not check whether the ruling has been appealed.

SEBI re-decides the disgorgement and restraint against the Raju family and executives Regulators, auditors and tax

On remand from the Securities Appellate Tribunal, SEBI whole-time member Ananth Narayan G. computed unlawful gains of about ₹624.1 crore across six noticees using an “intrinsic value” method: SRSR Holdings ₹518.37 crore, B. Suryanarayana Raju ₹51.44 crore, B. Ramalinga Raju and B. Rama Raju ₹20.43 crore each, V. Srinivas ₹9.58 crore and G. Ramakrishna ₹3.84 crore. Each pays individually, with 12% simple interest from 7 January 2009 (SEBI order).

The two Raju brothers are restrained from the securities market until 14 July 2028; the other four get no fresh restraint. The order says it takes effect only from the date the Supreme Court directs, because appeals against the earlier SAT orders are pending there.

The Securities Appellate Tribunal sends SEBI’s 2018 orders back Regulators, auditors and tax

SAT set aside SEBI’s 2 November 2018 orders, which had imposed 14-year restraints and disgorgement on the Raju brothers, Suryanarayana Raju and SRSR Holdings. It held that no reasons were given for choosing 14 years and that the gains had to be calculated individually, not jointly (LiveLaw; Bar and Bench). It told SEBI to decide again.

SEBI’s later order records that SAT directed the unlawful gain “to be borne individually” (SEBI order). Bar and Bench reports that the Supreme Court told SEBI to decide afresh but not to give effect to the result without its permission.

The Supreme Court issues notice on SEBI’s appeal against SAT’s PwC ruling Regulators, auditors and tax

SEBI appealed SAT’s September 2019 order. The Supreme Court issued notice and stayed the part of SAT’s ruling that held SEBI had no power to bar auditors (Business Standard; LiveLaw, 22 Nov 2019). It did not itself reinstate the two-year ban.

Status check (22 October 2026): AiTimeline searched for a later Supreme Court judgment or withdrawal and found none. Treat the appeal as unresolved unless the Supreme Court’s case-status portal shows otherwise.

SAT quashes SEBI’s two-year bar on the Price Waterhouse firms Regulators, auditors and tax

SAT set aside SEBI’s January 2018 order restraining specified Price Waterhouse firms from auditing listed companies for two years. It held that SEBI could not take that action against auditors, calling the measure “remedial and not punitive,” but it upheld the direction to give up about ₹13 crore in audit fees (SCC Online; LiveLaw).

SEBI re-issues its orders on remand Regulators, auditors and tax

After the SAT remands of 2017, SEBI’s order of 16 October 2018 restrained V. Srinivas and G. Ramakrishna for seven years and quantified their disgorgement at ₹15.66 crore and ₹11.5 crore. Its order of 2 November 2018 restrained the Raju brothers, Suryanarayana Raju and SRSR Holdings for 14 years and set disgorgement at ₹26.63 crore, ₹29.54 crore, ₹81.84 crore and ₹675.39 crore respectively (SEBI order, para 10-12). Both orders said they would take effect only as the Supreme Court directed.

The National Financial Reporting Authority is constituted Rescue and reform

The Government constituted the NFRA on 1 October 2018 under section 132 of the Companies Act, 2013, as an independent body for accounting and auditing standards and oversight (NFRA). Satyam was one of several cases that fed the debate on audit regulation; it was not the only influence on the 2013 Act or on the NFRA.

The Supreme Court upholds the finding against SRSR Holdings and Suryanarayana Raju Regulators, auditors and tax

Hearing appeals against SAT’s second order, the Supreme Court exonerated all appellants except SRSR Holdings and B. Suryanarayana Raju, and agreed with SAT on those two. About Suryanarayana Raju it said the SFIO report and the CBI court judgment “clearly and unmistakably point to his complicity” (quoted in SEBI’s 2023 order). The court said SRSR was a front entity used to offload shares.

SEBI bars Price Waterhouse firms from auditing listed companies for two years Regulators, auditors and tax

SEBI restrained specified Price Waterhouse firms (practising under the PwC brand) from issuing audit certificates for listed companies for two years and ordered disgorgement of audit fees of ₹13.09 crore with interest at 12% a year (LiveLaw; Wikipedia reports 11 January). SEBI had found the audit failed to detect the fraud.

The bar is often described as a settled ban. It was not: SAT quashed it in September 2019.

SAT upholds SEBI’s findings but remands the Raju family orders Regulators, auditors and tax

SAT’s first order (12 May 2017) upheld SEBI’s findings against the Raju brothers, Srinivas and Ramakrishna but sent back the period of restraint and the amounts, saying 14 years could not be imposed uniformly without reasons. Its second order (11 August 2017) did the same for Suryanarayana Raju and SRSR Holdings (SEBI order, para 5-6).

SEBI orders the Raju relatives and SRSR Holdings to disgorge Regulators, auditors and tax

SEBI’s second order (10 September 2015) directed relatives and associates, including B. Suryanarayana Raju and SRSR Holdings, to disgorge unlawful gains and restrained them for seven years. It made the two Raju brothers jointly and severally liable for those gains (SEBI order, para 3).

A sessions court suspends the sentences and grants bail Criminal case

On 21 April 2015 the Metropolitan Sessions Court had held the convicts’ appeal not maintainable and the accused remained in Cherlapally prison (The News Minute). On 11 May 2015 the same court suspended the seven-year sentences of Raju and nine others and granted bail on personal bonds, on condition they cooperate for early disposal of their appeals (Business Today).

AiTimeline did not find a reported final decision on the appeals. The sentences should be described as convictions under appeal, with sentence suspended.

Ramalinga Raju and nine others are convicted Criminal case

A special CBI court in Hyderabad convicted B. Ramalinga Raju, B. Rama Raju and eight others and sentenced each to seven years’ rigorous imprisonment (Business Standard; ICAI). The two brothers were also fined; reports give ₹5 crore and ₹5.5 crore each, so the exact figure is unconfirmed here.

It was the first criminal judgment in the case, six years and three months after the letter.

SEBI’s first order: 14-year restraint and disgorgement Regulators, auditors and tax

SEBI restrained B. Ramalinga Raju, B. Rama Raju, V. Srinivas and G. Ramakrishna from the securities market for 14 years and ordered disgorgement with 12% simple interest from 7 January 2009: ₹543.93 crore from share sales and ₹1,258.88 crore from pledges for the two brothers, ₹29.5 crore for Srinivas and ₹11.5 crore for Ramakrishna (SEBI order, para 2).

ICAI’s disciplinary proceedings against the auditors reach finality Regulators, auditors and tax

ICAI began disciplinary proceedings in January 2009. They finished in October 2010 in all cases but one and reached finality in October 2013. Its press release says the Disciplinary Committee found the audit partners S. Gopalakrishnan and S. Talluri, two audit in-charges, former CFO V. Srinivasu and the internal-audit head V. S. Prabhakara Gupta guilty of professional misconduct and removed them permanently from the register of members with a fine of ₹5 lakh each (ICAI press release, 9 Apr 2015).

Mahindra Satyam is merged into Tech Mahindra Rescue and reform

Tech Mahindra announced the merger with Mahindra Satyam on 21 March 2012 and it was legally completed on 25 June 2013 (Wikipedia). The company had been renamed Mahindra Satyam in July 2009.

The SEC and PCAOB penalise the PwC India firms Regulators, auditors and tax

The US SEC charged five India-based PwC affiliates for deficient audits of Satyam and obtained $6 million, which it described as the largest ever paid by a foreign-based accounting firm in an SEC action. It found staff did not confirm cash, cash equivalents or receivables, and that this “resulted in the fraud at Satyam going undetected.” The PCAOB separately fined Lovelock & Lewes and Price Waterhouse Bangalore $1.5 million combined (SEC press release 2011-82).

Raju’s lawyers say he never wrote the confession letter Criminal case

The CBI charged that Raju sent the letter on 7 January 2009. In July 2010 his lawyers told the court he had not written it, and the defence called it a hoax; they also argued separate teams handled the accounts (The News Minute). The 2015 conviction followed a full trial.

Tech Mahindra wins the auction for Satyam Rescue and reform

Tech Mahindra, through a subsidiary, won the public auction on 13 April 2009 and bought a 31% controlling stake (Wikipedia). On 22 April it made the public announcement of an open offer at ₹58 a share, when the market price was ₹46.9 (SEBI order, annex).

Correction to the draft brief: the bid was won on 13 April; 22 April is the open-offer announcement.

The Government replaces the board and agencies open their investigations Rescue and reform

On a Government petition the Company Law Board suspended Satyam’s board. The Government nominated Deepak Parekh, Kiran Karnik and C. Achuthan on 11 January, and by 24 February told the Rajya Sabha that six new directors had been appointed. The SFIO, CBI, SEBI, ICAI and the income-tax authorities were all investigating (Ministry of Corporate Affairs, PIB; Wikipedia). NSE removed Satyam from the Nifty 50 on 12 January, and on 14 January Price Waterhouse said its audit reports might be “inaccurate and unreliable.”

Raju is arrested and the shares collapse Criminal case

Andhra Pradesh police arrested B. Ramalinga Raju on 9 January 2009; reports say his brother Rama Raju was taken into custody around the same time. The shares fell to ₹6.30, their lowest since March 1998, from a 2008 high of ₹544 (Wikipedia; Rediff chronology).

Raju tells the board the accounts were false Fraud and confession

In a letter to Satyam’s board that the company filed with the US SEC, B. Ramalinga Raju said the 30 September 2008 balance sheet carried inflated cash and bank balances of ₹5,040 crore (the books showed ₹5,361 crore), non-existent accrued interest of ₹376 crore, liabilities understated by ₹1,230 crore and debtors overstated by ₹490 crore. For the September 2008 quarter he gave actual revenue of ₹2,112 crore against ₹2,700 crore reported, and operating profit of ₹61 crore (3% margin) against ₹649 crore (24%). He called Maytas “the last attempt to fill the fictitious assets with real ones” and wrote: “It was like riding a tiger, not knowing how to get off without being eaten” (letter as filed with the SEC).

On the “₹7,000 crore” figure: the letter states no total. The four balance-sheet items sum to ₹7,136 crore, which press reports round to ₹7,000 crore. The items are not all the same kind of error, and the figure is not an amount stolen.

Satyam proposes to buy two Maytas companies and reverses within a day Fraud and confession

On 16 December 2008 Satyam’s board approved buying Maytas Infra and Maytas Properties, companies linked to the founder’s family, in a deal reported at about $1.6 billion. Investors objected and the plan was scrapped on 17 December (Business Standard; Rediff chronology). Raju’s January letter called it a last attempt to turn fictitious assets into real ones.

Satyam receives a Golden Peacock award for corporate governance Fraud and confession

Satyam was given the 2008 Golden Peacock Global Award for Excellence in Corporate Governance on 23 September 2008. After the confession the jury withdrew it, according to a report of 8 January 2009 (reproduced on a forum; AiTimeline did not find the original).

SEBI says the manipulation of the books began Fraud and confession

SEBI’s investigation found that Raju, Rama Raju, Srinivas, Ramakrishna and the head of internal audit V. S. Prabhakara Gupta had, since January 2001, colluded in overstating and falsifying the books of account and financial statements (SEBI order, para 1). This is SEBI’s allegation as recorded in its order and as upheld by SAT on the violation findings; it is not the same as the criminal judgment.