M Rammaohan Rao has stepped down as dean of the Indian School of Business in Hyderabad, following further evidence of fraud at computer outsourcing company Satyam, where Prof Rao was on the board of directors. A new board of directors for the company has been appointed by the Indian government.
In a statement to the ISB community Prof Rao said that his continuing preoccupation with the evolving situation at Satyam was having a negative impact on his ability to continue as dean. “This is a difficult decision for me, given my commitment to ISB, its faculty, students, staff, alumni, research and academic associates,” he wrote. “But, it is precisely this commitment that has convinced me that this decision is in the best interest of ISB.”
Professor Rao went on to say he had “absolutely no prior knowledge” of circumstances revealed last week by former chairman, B Ramalinga Raju. Mr Raju wrote to the Satyam board confessing to manipulating the company’s accounts over a period of several years in a fraud worth more than $1bn. The scandal has been dubbed ”India’s Enron.”
The resignation will have limited impact on the running of ISB as Prof Rao had intended to step down from the dean’s position in June 2009 and a search committee is already in place looking for his replacement. In the interim six months deputy dean Ajit Rangnekar, who has been with ISB since 2003, will step up to the job.
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