B. Ramalinga Raju is expecting to spend as long as a decade behind bars for orchestrating a £1 billion fraud.

“He has said he will submit himself to Indian justice. If it comes to jail, then he is ready for that,” Bharat Kumar, Mr Raju's lawyer, said onThursday. Mr Raju, 54, the son of a grape farmer, confessed on Wednesday to falsifying the accounts of Satyam, the IT services group he built from scratch over 30 years, by wildly inflating the group's profitability.

Satyam and its senior executives also face legal action in the US, where investors filed two class action lawsuits against them for concocting fictitious financial figures. The litigants alleged that Mr Raju's deception, news of which led the value of Satyam's American depository receipts to plummet 90 per cent in New York, cost them billions of dollars.

Vianale & Vianale and Izard Noble, two law firms representing ADR holders, alleged that Satyam, the first Indian technology company to list on the Nasdaq exchange, and its management violated US securities law by issuing false and misleading statements.

Many of Satyam's 53,000 employees were in shock amid fears the full scale of the fraud is not yet known. After a spokesman for the company admitted it had no idea where Mr Raju was, his lawyer was forced to rebut reports that he had fled to the Middle East. “He is very much in [the southern city of] Hyderabad, awaiting justice,” Mr Kumar said.

In a hastily convened press conference, Ram Mynampati, the company's interim chief executive, said on Thursday that Satyam will face liquidity problems by the end of the month. The crisis could pose operational problems for the company and its clients, which include many multinational blue-chip companies from Tesco to General Electric.

In a confessional letter to the Satyam board, Mr Raju insisted that he had not profited personally through the fraud, which he claimed began when he fudged the company's figures to smooth over a minor accounting discrepancy. He described how, as the deception spiralled out of control, he felt as if he was “riding a tiger, not knowing when to get off without being eaten”.

However, his actions have rocked confidence in India's corporate governance system and may lead to foreign investors shunning the country. Some analysts have suggested that many of the country's companies badly needed to be jolted out of improper patterns of behaviour.

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