Hyderabad: The disgraced founder and former chairman of Satyam Computers Services Ltd used his elderly mother’s name to siphon $1 billion from the company and drastically inflated the number of employees to divert funds, a prosecutor said in court on Thursday.
The allegations cast serious doubt on B Ramalinga Raju’s claims that the massive fraud was an elaborate attempt to keep the company afloat and that he did not personally benefit from the scandal.
Prosecutor Ajay Kumar also said Raju was involved in as many as 400 suspicious land deals in the south Indian state of Andhra Pradesh, where Satyam is based.
In the hearing in Hyderabad, the state capital, Kumar asked the judge to extend the custody of Raju and two other Satyam executives, who have been arrested on charges including cheating and forgery, because the investigations were ongoing.
“We have to find out where exactly the company funds were diverted and in whose name they were diverted,” Kumar said.
A lawyer for Raju, Ravinder Reddy, said the three Satyam executives, Raju, his brother B Rama Raju, former chief executive, and Vadlamani Srinivas, former chief financial officer should be released on bail because they had already undergone extensive interrogations.
A judge was expected to make a decision later Thursday.
Kumar also said that Raju’s claims that Satyam employed 53,000 people were exaggerated, and the company’s true work force was 43,000.
“Every month an amount of ($4 million) was being drawn in the name of nonexistent employees,” said Kumar.
Kumar also said large amounts of Satyam shares were improperly transferred to Raju’s mother, Appalla Narasamma, and a younger brother, Suryanarayana Raju.
On 7 January, Raju confessed to doctoring the company’s books for years, fabricating, among other things, $1 billion in fictitious cash deposits. He claimed he did not benefit from the fraud.
The government has appointed a board of six people to hire new auditors and find new management in an attempt to keep the struggling company afloat.