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CBI probe to now focus on fund diversion

CBI probe to now focus on fund diversion
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First Published: Thu, Apr 09 2009. 12 25 AM IST

In the dock: B. Ramalinga Raju. Madhu Kapparath / Mint
In the dock: B. Ramalinga Raju. Madhu Kapparath / Mint
Updated: Thu, Apr 09 2009. 12 25 AM IST
Hyderabad: The Central Bureau of Investigation (CBI) claims to have proof that money from Satyam Computer Services Ltd may have been transferred to other companies promoted by the Raju family, according to three officials of India’s federal investigation agency who separately confirmed this.
In the dock: B. Ramalinga Raju. Madhu Kapparath / Mint
The agency, which has been investigating the fraud at Satyam whose founder B. Ramalinga Raju confessed on 7 January to having fudged the software firm’s books to the tune of at least Rs7,136 crore, had initially focused on the accounting swindle, the officials added. It filed on Tuesday its so-called chargesheet, listing the sections of Indian law under which Raju and eight others had committed crimes, meeting a deadline set for it to do so by the government.
“CBI has evidence that indicate the possibility of funds diversion,” said one CBI official, who asked not to be identified. This official added that the filing of chargesheets against “persons not directly connected to Satyam, but related to its promoters’ family” was part of the effort to widen the “scope of the probe”. One such person, according to CBI, is B. Suryanarayana Raju, Ramalinga Raju’s younger brother, a director of SRSR Advisory Services Pvt. Ltd.
“The CBI probe will also look into the angle of funds diversion from Satyam and we will keep filing supplementary chargesheets on others as and when we obtain fresh evidences along with witnesses,” said CBI’s deputy inspector general V.V. Lakshmi Narayana.
“The CBI has adequate evidences in its possession to believe that the six Satyam executives, two auditors and Ramalinga Raju’s younger brother, B. Suryanarayana Raju, who is running a financial advisory services firm, have conspired together in the fraud,” said a second CBI official, who too declined to be identified.
Others against whom the agency has filed chargesheets in the case include Ramalinga Raju’s elder brother and Satyam’s former managing director B. Rama Raju, Satyam’s former chief financial officer Srinivas Vadlamani, Price Waterhouse auditors S. Gopalakrishnan and Srinivas Talluri, who signed off Satyam’s accounts for the past eight years, and three executives from the software firm’s finance department—G. Ramakrishna, D. Venkatapathi Raju and C. Srisailam.
“We believe Suryanarayana Raju has played a key role in the conspiracy as far as funds movement of Satyam is concerned, whether it was inward or outward,” said the second CBI official.
This official pointed to Ramalinga Raju’s confession letter dated 7 January where he had claimed to have arranged around Rs1,230 crore for Satyam over the past two years—money that was not reflected in its books.
“These funds were said to be have been arranged by the entities that are owned by the members of Raju’s family, without being reflected in the books of Satyam for years. This leads us to suspect that the family members of Raju played a role in funds movement in Satyam,” said a third CBI official, on condition of anonymity.
Meanwhile, the CBI designated court has posted orders on the bail petitions of the Price Waterhouse auditors to Thursday. It has also asked the Chanchalguda Central Jail police to present before it on Thursday the Raju brothers and Vadlamani to enable CBI officials to obtain their sample signatures and handwriting samples.
Price Waterhouse, in a statement issued late on Tuesday, said, it was “surprised and disappointed that the Central Bureau of Investigation has pressed charges against the two partners who worked on the audit of Satyam’s financial statements”.
Stating that it was awaiting specific charges against the two partners, the audit firm said: “The fraud perpetrated by Mr Raju and his cohorts was designed to and did circumvent Price Waterhouse India’s audit process; the two Satyam audit partners—and Price Waterhouse India—were victims of that fraud.”
The first CBI official, however, claimed that the agency “has evidence to believe that the auditors were party to the conspiracy”.
While the Raju brothers’ lawyer, S. Bharat Kumar, declined comment on the chargesheet, K. Ravinder Reddy, counsel for Vadlamani, said he is yet to be served a copy of the charges against his client.
B. Ravindranath, special public prosecutor and counsel for CBI, said the designated court is currently verifying the documents submitted to it and could serve notices to the accused in the case in a day or two.
Mint couldn’t reach immediately for comment the lawyers of the others against whom CBI has filed chargesheets.
Meanwhile, Satyam’s government-appointed board is proceeding with its effort to sell a controlling stake in the company. The final bids for this stake are expected to be placed by the morning of 13 April.
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First Published: Thu, Apr 09 2009. 12 25 AM IST