The chairman of one of India’s largest IT outsourcers has resigned after confessing to a £1 billion fraud, in a scandal that has been dubbed the country’s Enron.

B. Ramalinga Raju, 54, chairman and founder of Satyam, said that he had wildly inflated the company’s profitability for years. The deception, which went undetected until he revealed it, resulted in the presence of 70 billion rupees (£950 million) of “nonexistent” cash on the group’s books.

“It was like riding a tiger, not knowing when to get off without being eaten,” Mr Raju said, describing how the fraud, which he claimed began as an effort to smooth over a minor accounting discrepancy, had “attained unmanageable proportions”.

He added in a letter to Satyam’s board: “I am now prepared to subject myself to the laws of the land and face consequences thereof.”

Under particular scrutiny will be the role of PricewaterhouseCoopers, Satyam’s auditor since 2001, when the group listed on the New York Stock Exchange, which appears to have missed a huge systematic fraud.