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As 5 get bail, is Satyam case losing steam?

As 5 get bail, is Satyam case losing steam?
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First Published: Tue, Jul 20 2010. 10 54 PM IST

Graphic: Ahmed Raza Khan/Mint
Graphic: Ahmed Raza Khan/Mint
Updated: Tue, Jul 20 2010. 10 54 PM IST
Hyderabad: In another sign of the government’s weakening case against the fraud in Satyam Computer Services Ltd, five of the accused were freed on bail on Tuesday, leaving just the main accused B. Ramalinga Raju still in jail.
The Andhra Pradesh high court granted bail to B. Rama Raju, former Satyam managing director and brother of the chief accused, and four others: Satyam’s former chief financial officer Vadlamani Srinivas and employees G. Ramakrishna, Venkatapathy Raju and Ch Srisailam. Overall, 10 people were accused in the scam and three chargesheets filed by the Central Bureau of Investigation (CBI), but the court hearing in the case has not yet begun.
Ramalinga Raju revealed the multi-crore accounting fraud at Satyam on 9 January 2009. Tech Mahindra Ltd has since taken over the firm and rebranded it Mahindra Satyam. But CBI has made little headway in the case.
Raju has avoided appearing before the special court constituted for the Satyam case, claiming a hepatitis C affliction that leaves him confined to hospital. On 2 July, Raju’s doctor, Ajith Kumar, at the Nizam’s Institute of Medical Sciences in Hyderabad, testified that his patient was fit to depose in court as long as the premises were fumigated. The court then instructed Raju to file an affidavit indicating his willingness to file responses to the court’s questions through his counsel. Despite this, Raju is yet to be cross-examined.
“The court has to begin to distinguish between crimes of this magnitude and normal cases,” said Amarjit Chopra, president of the Institute of Chartered Accountants of India, which regulates Indian auditors and accountants, protesting at the latest turn of events. “We have been issuing notices to the accused to appear before the court, but if it passes a judgement against us, what can we do?”
Graphic: Ahmed Raza Khan/Mint
With Tuesday’s developments, all the accused who were initially arrested on non-bailable warrants are now out on bail. The premise for granting bail is not yet known, as the order copy has not yet been released by the high court. Last month, one of the PricewaterhouseCoopers (PwC) auditors, S. Gopalakrishnan and internal auditor V.S. Prabhakar Gupta were granted bail, citing the delay in the commencement of the trial as a reason.
The other PwC auditor, Srinivas Talluri, was released on bail in February. B. Suryanarayana Raju, the youngest sibling of Ramalinga Raju, has been out on anticipatory bail since March last year.
Meanwhile, CBI has still not addressed the siphoning away of funds from Satyam—the most damning charge against Ramalinga Raju—in any of the chargesheets it has filed so far.
The first chargesheet filed last year relates to fudging of company accounts and cheating shareholders by nine of the scam accused. The second one, filed soon after, adds the charge of creation of fake customers.
In January, CBI filed a third chargesheet on the creation of false income-tax liabilities.
All of these refer to the comparatively lesser crime of fudging a balance sheet without speaking of fund diversion. A fourth chargesheet, yet to be filed by CBI, was supposed to address this. The bureau had sent letters to six countries seeking information to help it trace some of the accounts used by the accused.
On 5 July, CBI indicated it was undecided about this fourth chargesheet as only four of the six countries had responded to the letters rogatory—a formal request by an Indian court seeking judicial assistance from a foreign one through diplomatic channels.
Many stakeholders following the case closely are not convinced. “The CBI has plenty of evidence of fund diversion already,” said Ye. Seshasai Babu, a chartered accountant who has also been helping the Serious Fraud Investigation Office in its case against Satyam. “There is evidence of fixed deposits in Indian banks and TDS (tax deducted at source) certificates on interest paid out to Satyam. Why is it so difficult for CBI to file the fourth chargesheet?”
CBI deputy inspector general V.V. Lakshmi Narayana only said: “We cannot comment yet on whether this bail order is a setback or not because we do not know the grounds on which it has been granted.” A spokesperson for the Securities and Exchange Board of India did not respond to email queries. Over the period of the investigation, the total fraud amount detected, including losses to investors, has climbed to around Rs14,000 crore from the original Rs7,136 crore admitted by Raju, according to?charges filed by CBI.
priyanka.p1@livemint.com
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First Published: Tue, Jul 20 2010. 10 54 PM IST