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SEBI begins probe into Satyam fraud

S. Nagesh Kumar and A. Saye Sekhar

— PHOTO: Satish H.

Satyam’s Interim CEO Ram Mynampati.

HYDERABAD: A day after the Rs. 7,100-crore fraud surfaced in Satyam Computers, special teams of the Securities and Exchange Board of India (SEBI) and the Registrar of Companies (RoC) began investigations at the company’s offices here on Thursday.

Armed with an order from an economic offences court, RoC and SEBI officials searched Satyam’s registered office at Secunderabad and seized books and records.

A three-member SEBI team, led by its Southern Region general manager A. Sunil Kumar, spoke to senior Satyam executives about the veracity of the confessional statement of B. Ramalinga Raju, who quit as Chairman on Wednesday.

The team also contacted top officials of the Andhra Pradesh government to seek cooperation in the probe. The team is believed to have visited the office of the company’s auditors, PricewaterhouseCoopers (PwC), whose accounting procedures have come under the scanner.

“Raju in Hyderabad”

The investigations coincided with a statement from Mr. Raju’s advocate S. Bharat Kumar. It denied that Mr. Raju had fled the country. Mr. Kumar said, “Mr. Raju is very much available in Hyderabad.”

Recalling Mr. Raju’s letter to the Board of Directors that he was prepared to subject himself to the law of the land, Mr. Kumar said that “should the need arise, Mr. Raju shall make himself available for a probe or any legal process by the government agencies.”

Amid these developments, Satyam’s Interim CEO Ram Mynampati indicated that a takeover by a potential suitor was an option before the company. It was working on a “potential transaction of a different kind,” he said at a press meet.

Admitting that the company’s liquidity position was weak, he said only a thorough evaluation could establish whether the company had sufficient funds for paying salaries to its associates for January.

CFO resigns

Chief Financial Officer Srinivas Vadlamani had sent in his resignation and the company would either identify an interim CFO or engage an external agency to look into the accounts. For now, PwC would continue to be the official auditors, he said.

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