New Delhi: Sebi chairman C.B. Bhave and representatives from the Reserve Bank of India and corporate affairs ministry are likely to brief the parliamentary standing committee on finance about the latest developments in the Satyam fraud at a meeting called on Wednesday.
In addition to representatives of the Securities and Exchange Board of India, or Sebi and RBI, sources said, officials from the banking division of the finance ministry have also been called by the committee to give details of the Rs 7,800 crore Satyam fraud issue.
The 30-member committee, headed by Bharatiya Janata Party member Ananth Kumar, according to people familiar with the issue, will try to ascertain the extent of fraud, role of auditors and veracity of the letter of founder chairman Satyam Computer Services B. Ramalinga Raju, who disclosed that the IT company was fudging accounts.
Besides, the committee would also try to find out whether any pressure was being exerted on the investigating agencies to cover up the fraud amid speculation about involvement of political personalities and the other companies promoted by kin of Raju, like Maytas Infra and Maytas Properties.
In a bid to salvage the situation following admission of fraud by Raju, the government superseded the board of Satyam and appointed its own nominees on the board.
The new board has already asked leading auditing firms — KPMG and Deloitte — to re-state the accounts of the Satyam Computer in order to find out the true financial position of the company. The board’s fourth meeting, scheduled for Monday was postponed, though no reasons were given for the same.
Apart from superseding the board of Satyam, the ministry of corporate affairs (MCA) had ordered an inquiry by Serious Fraud Investigation Office (SFIO) and asked the Registrar of Companies (RoC), Hyderabad to inspect the accounts of eight related companies, including Maytas Infra and Maytas Properties.
The preliminary report of Hyderabad RoC, which is with MCA, has indicated the possibility of “diversion or siphoning” of funds by Raju.
The Company Law Board (CLB) had already directed Raju, his brother Rama Raju and three other functionaries, including Ram Mynampati, Vadlamani Srinivas and company secretary G.J. Jayaraman, not to sell shares and other assets without the permission of the board.
In addition to the investigation by central agencies, the Satyam fraud is also being probed by CID-Investigating Wing of Andhra Pradesh Government, which had arrested Raju, Rama Raju and Srinivas.
Meanwhile, S. Gopalakrishnan and Srinivas Tuluri, two representatives of the PricewaterHouse, which audited the accounts of Satyam, too, have been arrested.
The members of the standing committee are also likely to inquire about the role of auditors in Satyam and the action taken by the Institute of Chartered Accountants against the auditing company.
The 30-member parliamentary committee include Gurudas Das Gupta, Bhartruhari Mahtab, Rupchand Pal, R Prabhu, M.A. Kharabela Swain, S.S. Ahluwalia and M. Venkaiah Naidu.