The best advice Ramalinga Raju ever received came from his father. “If something takes three months to complete, ask yourself if it can be done in a week without compromising on the outcome or quality,” he once told him over dinner.

Young Raju heeded these wise words on founding Satyam Computer Services in 1987. By stripping cost and complication from the IT systems of blue-chip customers, including Unilever and Sony, it grew to become India’s fourth-largest outsourcing company, employing 53,000 people.

But last week it became clear that Raju had extended the mantra of short-cutting to his accounts, dealing a hefty blow to the reputation of his industry as well as his country.

He shocked corporate India by confessing to having cooked the books at Satyam for years. In a fraud already labelled as India’s Enron, Raju inflated the reported cash and bank balances of the company — whose name means trust in Sanskrit — by $1 billion (£660m), while overstating revenues and understating liabilities. As the company grew, the gap between fact and fiction widened.

“It was like riding a tiger, not knowing how to get off without being eaten,” the 54-year-old wrote in his resignation letter. This weekend he is being held in custody, leaving a trail of destruction and unanswered questions behind him.

Satyam’s shares fell 78% on Wednesday, sending investors, including Aberdeen Asset Management, sprinting for the exit. The slide continued into the weekend as analysts ripped up their profit forecasts.

Raju revealed that in the quarter to September, Satyam’s revenues had been overstated by 76% and profits by some 97%. The stated operating margin of 24% actually stood at 3%.

Wednesday’s 7% decline in the subcontinent’s Sensex share index underlined the scandal’s wider impact on the reputation of Indian business on the world stage.

Many Indian companies are still dominated by founding families, like Satyam, which counted three Rajus on its board. They have struggled to shake off a reputation for nepotism and lack of transparency.

However, such fears did not stop Satyam listing its shares in Amsterdam and New York. American investors have filed lawsuits alleging it broke the law by issuing misleading statements. Price Waterhouse Coopers has little to say. It has audited the books for the past seven years — Satyam was one of its flagship Indian accounts.

Although Raju tried to exonerate board members, senior executives and his extended family, observers doubt such a fraud could have been carried out on his own.

“These things are never a one-man job,” said Robin Johnson, a partner at the law firm Eversheds. “It starts with a powerful guy bullying people into doing it. There must have been others who have kept quiet.”

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