Ramalinga Raju admits to diverting Satyam money
21 Jan 2009, 1724 hrs IST, IANS
Text:
HYDERABAD: Disgraced founder and former chairman of Satyam Computer Services B. Ramalinga Raju has confessed that he diverted funds of the IT
company to the two real estate firms promoted by his family, state police sources said here on Wednesday. Raju, who was grilled Wednesday for the fourth day by officials of Criminal Investigation Department (CID) of Andhra Pradesh police, also reportedly admitted using the Satyam money to buy prime land in and around Hyderabad.
CID sources said Raju told interrogators funds were diverted during the past four to five years. This means Raju's Jan 7 statement that he inflated company accounts was a red herring. While resigning as company chairman, Raju had admitted to a Rs.70 billion (Rs.7,000 crore/$1.43 billion) accounting fraud, saying the company had cooked its books over several years resulting in inflated (non-existent) cash and bank balances. He reiterated this during CID interrogation soon after his arrest January 9.
But investigations have now revealed that a big chunk of this money existed but was diverted to other firms. CID, which took Raju, his brother and former managing director B. Rama Raju and former chief financial officer Vadlamani Srinivas in custody for four days following a court order, grilled the former Satyam boss on the basis of his confession. After prolonged interrogation, Raju finally admitted to diverting Satyam funds to his family firms — Maytas Properties and Maytas Infra. He told CID sleuths that this was going on since 2004. Raju not only diverted funds out of Satyam but is also believed to have misled company auditors PricewaterhouseCoopers (PwC) by submitting fake bank documents. CID and some regulatory agencies have already seized some documents from PwC. Raju also reportedly swindled money through 6,000 fake salary accounts for last few years. Sources said he had created these accounts in four banks to divert the funds from fixed deposits. Some of these funds were flowed through his accounts in foreign banks. The company's claims that it had 53,000 employees came under scrutiny after Raju's January 7 confession. The government-appointed board is also trying to ascertain these figures. With Raju confessing to diversion of funds, the Serious Fraud Investigation Office (SFIO) and Registrar of Companies (RoC) are now trying to trace a Mauritius-based company used for channelising the money to Maytas. The central government has already asked SFIO to extend the ambit of investigations of Satyam fraud to cover both Maytas Properties and Maytas Infra. A team of SFIO is checking the accounts and records of the two firms. However, both the firms have denied that they received any funds from Satyam.
Wooo. I had such huge doubts about ramalinga raju's confession. The very moment i heard him i felt something was amiss.
ReplyDeleteIf we consider psychologically here was a guy who was admitting to great wrong doing and was supposed to be in huge remorse.
Then y did he make a statement at 11 in the morning when he could have done that after market hours, specially since the next day was a trading holiday.( He had announced the maytas deal after market hours in india because he knew the likely impact )
He very well knew the impact he was going to have on the markets. Infact it was the time when nifty was about to break out on the upside. The timing could also be attributed to that. Maybe he was offered a huge amt by someone who had gone extremely short on hte market and needed an exit.
I mean u never know. But one thing is sure the Indian IT co's profitability is stil good and so is satyams.
Hopefully we ercover soon and the FII's start pumping in the moolah in our growing economy
Dear Rajeev,
ReplyDeleteI am expecting your valuable comments of RIL issue, which I raised in the section of comments of the post of Morgan Stainly.
Dinesh Chhajed
Hi Rajeev Ji,
ReplyDeleteIts been a long time I wrote to you. Hope you are doing good.
Can you please share your views on some of your old stocks Tanfac, Artson and Innocorp. Can one buy into these scripts at present.
Also share views on coromandal fertilizers if u track it.
Thanks,
Sumit.
Dear Dinesh,
ReplyDeleteYes I read your post on Ril Ind but due to peaucity of time I have not been able to give my view.
Well, these are some emails that is doing round in the Investor camps and that is done by Bear capms to break the market below 7600 level.
What is written can be true but I don't think MA will make it so easy to let him got catch in this imbarligo.
But now what concerns me is that SEBI has told all promoters to declare how much shares have been pledge to the banks or DII's and that can gave a rippling effect in the market because as soon as the Bear capms will know that they will sell in futures market and also dump them while borrrowing it from DII and FII's.
SS and likes are ready for that.
If you remember I wrote a very detail view about the decision of SEBI to borrow stocks from DII and FII and it was a wrong decision which came at wrong time.That is proving correct now after 1 yr.
The lending stocks mechanism was absolutely wrong decision in Jan 2008!Bears are ready to take market to 2000 Nifty and break sensex below 7000 while A gr stocks still have room to go down Cash gr is almost on death bed.