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Mixed Media: How Raju fuelled the dotcom mania in '99

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Mixed Media: How Raju fuelled the dotcom mania in '99

In 1999, when India was just waking up to the world of the Internet, one man did the impossible. A Columbia university graduate and an IITian, Rajesh Jain, sold IndiaWorld and a slew of other sites like Samachar, Khel, Bawarchi etc for a cool sum of Rs 499 crore.

I was with Mid-day then, my colleague Hoshie Ghaswalla (now with Cyber Media) and I were struggling to get bossman Tariq Ansari to put in more monies into Ansari and the management team wouldn't part with any funds. That was until they read the IndiaWorld acquisition.

Meanwhile at all the eatspots in Mumbai, deals were being struck feverishly. B-school graduates from all and sundry, techies, ad professionals and journos were quick to hop onto the bandwagon. Salaries skyrocketed, and folk earning less 10k per month got five times their salary.

Having resisted the television bug of the early 1990s, a fat salary and fatter stock options pulled me out of a comfy job at Mid-day to Atul Nishar's Aptech. The computer training major was so taken in by the frenzy and even though many in the IT industry said the acquisition was only to shore up market cap of a wannabe, Nishar too bit the bullet. And launched an ISP and a portal called The name rang a bell, the brand consultant said then.

It sure did. Of a warning that the dotcom boom days are numbered. Creative P-and-L worksheets and projections did most of them in.

By this time, the IndiaWorld sale was complete. There were various stories doing the rounds. That Jain got all the money, kept some and gave the rest back to the guy who paid him all the millions.

I dismissed all of it as small talk by people who were envious of the deal. By business rivals of the wannabe who missed an opportunity. The deal was quietly forgotten. Rajesh Jain is now into Netcore Solutions, has successfully evangelised mobile content through My Today and is junior partner to the new venture that Outlook's Maheshwar Peri is setting up.

Nothing extraordinary about this story except that the wannabe businessman who parted with Rs 500-odd crore to acquire IndiaWorld is none other than Ramalinga Raju, chairman of Satyam.

The IndiaWorld sites are now part of Sify, where Raju or his family have no connection whatsoever, and even though Jain's reputation is squeaky clean, one can't help giving a 0.000001 per cent benefit of doubt to the self-confessed fraudster's detractors who I scoffed at then.

As correspondent Joe Leahy notes in London's Financial Times, "while such deals were common during the internet era, Satyam agreed to pay for IndiaWorld with cash rather than paper, leading to mutterings within the market that something was amiss with the transaction."

I haven't studied the Satyam-Jain transaction enough to comment on the "mutterings", but what I do know is that there were several hundred people across the country who – like me – caught the dotcom bug after Ramalinga Raju announced his acquisition.

It was a business model fraught with risks. Like many of my friends, I too got taken by all the hype and the fact that so many people had quit more steady and lucrative jobs like mine. But it was Satyam's act and Raju's reasoning for it that got me to hop on. From my modest existence in Mumbai's Mahakali Caves Road, I was dreaming of a bungalow on Malabar Hill.

At the time of writing, the brothers are cooling their heels in custody. Given the ways in which the rich and famous tend to be let off despite the wrongs, there's a fear that the Rajus and their accomplices will be pardoned. That while they are occupying headlines now, but they'll soon be in the inside pages and eventually get out when things cool off. But this is the age of 24x7 television and I'm not sure if India's #1 white collar terrorists will get away easily. And they mustn't.

Pradyuman Maheshwari is group chief editor for and impact. The views expressed here are his own. Email


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