Fraud office to discontinue probing Satyam scam

Fraud office to discontinue probing Satyam scam

New Delhi: The government has asked the Serious Fraud Investigation Office to discontinue its enquiry into the siphoning of funds by Satyam Computer to avoid duplication of work as the CBI is trailing the funds parked abroad by the IT company.

“Now, only the CBI will file a report on the money-siphoning angle in the Satyam case. The SFIO has been asked to discontinue with the probe into that matter. We don’t want any duplications. Now SFIO will file a chargesheet pertaining to company law violations," a Corporate Affairs Ministry official said.

The Ministry had in August asked its investigative arm SFIO to probe into siphoning off of funds by the promoters of Satyam and submit a report within two months.

The decision to ask SFIO to stop probing the money siphioning angle in the 10,000-crore accounting fraud was taken by the Coordination Committee on Satyam set up by the ministry to oversee the investigation and ensure that the case reaches its logical conclusion.

The SFIO, which intially probed the scam, has given a 14,000-page preliminary report to the Ministry and is required to submit final report in the case. The SFIO report mainly dealt with violations of the provisions of the Companies Act.

Another reason for asking the SFIO to dicontinue the probe was, the MCA official said, because the agency is not empowered to trail funds abroad.

Sources had earlier said the SFIO could seek more time to complete the investigation into the money-siphoning angle as that would require scrutinising the balance sheets of over 350 companies and 800 bank accounts.

Ever since Satyam founder B Ramalinga Raju confessed to the accounting scam in January this year, there have been suspicions about funds having been shifted overseas.

Although the SFIO had sumitted a report in April, sources said the report had not been able to track down the chain of events leading to diversions of funds.

They said the SFIO report did not indicate who the beneficiaries of third-party transactions of about Rs600 crore are. Similarly, the end use of funds raised through the American Depositories Receipts worth $100 million is yet to be detected.

The preliminary report, however, showed violations of various provisions of the Indian Penal Code like criminal breach of trust, forgery and cheating.