Home >companies >news >Satyam: ED chargesheets Ramalinga Raju, others

Hyderabad: The Enforcement Directorate (ED) on Monday filed a prosecution complaint in the Satyam fraud case, charging 213 people including prime accused B. Ramalinga Raju, his relatives and close associates, and 166 firms including Satyam Computer Services Ltd (SCSL) of money laundering.

Raju was the chairman of Satyam Computer in January 2009 when he confessed to mis-stating the company’s accounts to the tune of 7,136 crore over several years.

The Satyam financial fraud, as it came to be known, was investigated by several agencies including the Central Bureau of Investigation (CBI), ED, Serious Fraud Investigation Office (SFIO) and the income-tax department.

In its chargesheet, the ED sought to prosecute and punish the accused under the Prevention of Money Laundering Act (PMLA).

“During investigation under PMLA, it transpired that Shri B. Ramalinga Raju and other accused in the CBI chargesheets derived proceeds of crime from sale or pledge of inflated shares of M/s SCSL," the ED said in a statement, adding that Raju along with his relatives and associates had floated 327 firms that were “used to layer the proceeds of the crime".

“Investigation by the Directorate of Enforcement revealed that the accused have purchased movable and immovable properties under their names, in the name of front companies and in the name of close relatives, associates who were also directors in the front companies," the agency said. “The accused also received bonus shares, shares under employee stock option schemes and dividends on the inflated shares of M/s SCSL and gained wrongfully."

The complaint was submitted to a designated court handling the Satyam fraud case.

The ED issued six provisional orders attaching 350 immovable and five movable properties valued at 1,075 crore, during the course of the investigation. This included 822 crore in fixed deposits belonging to Mahindra Satyam, the rebranded entity of Satyam Computer after it was acquired by Tech Mahindra Ltd in 2009 in a government-overseen auction.

The accused also distanced the “crime proceeds" from its initial beneficiaries by way of interconnected transactions “with an ulterior motive to project the properties so acquired as untainted ones", the ED said.

Investigation is underway in India and abroad for further identification of proceeds of the crime, the ED added.

The ED took up the investigation on the basis of three chargesheets filed by the CBI, which accused Raju and others of offences under Sections 420, 467 and 471 of the Indian Penal Code (IPC). These sections are scheduled offences under PMLA.

The chargesheet was submitted to the XXI additional chief metropolitan magistrate-cum-special sessions judge, who is heading the designated court in Hyderabad that’s looking into all the cases related to the fraud at Satyam.

The high court of Andhra Pradesh in February had stayed the ED’s provisional order attaching the deposits.

Tech Mahindra integrated Mahindra Satyam with itself in June after the approval of the high court, which at the time of granting the merger ruled that pending investigation by government agencies and prosecution in various legal forums will continue under the new management.

“If any future prosecutions and investigations are to be laid against the petitioner-company (Mahindra Satyam), the transferee company (Tech Mahindra) is liable," judge N.R.L. Nageswara Rao said in his judgement.

The court also asked the management of Tech Mahindra to cooperate with agencies such as SFIO and ED. “The attachments ordered by ED and other institutions shall continue till they are verified or vacated by the competent authority," the court ruled.

A Tech Mahindra spokesperson refused to comment as the company had not reviewed the chargesheet.

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