The Hindu : Front Page : “Satyam diverted funds to buy Nipuna shares”

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Thursday, Apr 23, 2009
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“Satyam diverted funds to buy Nipuna shares”

N. Rahul

HYDERABAD: The controversy over the claim of the former Satyam chairman, B. Ramalinga Raju, that he had infused Rs. 1,425 crore into the company took a new turn on Wednesday as the Central Bureau of Investigation charged the firm with investing Rs. 175 crore from out of the money to acquire preferential shares of Nipuna Services, a Satyam business process outsourcing (BPO) company promoted by Mr. Raju and his brother Rama Raju.

The payment for the preferential shares was made out of Rs. 1,425 crore received from 37 front companies of Satyam, the CBI told a court here during arguments over the bail applications of Raju brothers and the former Chief Financial Officer, Srinivas Vadlamani. The court reserved orders on the bail pleas as also on an application by the CBI to subject the three accused to lie detector test and brain mapping on Saturday.

The CBI, in its charge sheet submitted to the court a few days ago, backed the claim of the government-appointed board of the company that the firm did not owe any money to the front companies floated by Mr. Ramalinga Raju. It recalled that he had claimed to have infused Rs. 1,425 crore into Satyam by pledging shares held by his family in several front companies. Mr. Ramalinga Raju’s contention was that Satyam owed Rs. 1,230 crore to his family members out of the money that he had brought.

The CBI, however, then lent no credence to Mr. Ramalinga Raju’s claim as it found no proof that the latter had infused money. The agency said it found no entries in this regard in Satyam’s books of accounts. It recovered only letters written by directors of 37 front companies on January 8 staking claim to the money lent to Satyam. These letters were written at the behest of Mr. Ramalinga Raju, it said.

Opposing the bail applications, CBI special public prosecutor Balla Ravindranath argued that investigation also revealed that there was evidence of benami share transactions by Mr. Ramalinga Raju in the names of trusted employees of Satyam, front companies and his relatives. Mr. Rama Raju conspired with Mr. Ramalinga Raju to ensure the transfer of Rs. 194.6 crore from the Satyam account to a company floated by the former and his family members without the consent of the board. Mr. Rama Raju was also responsible for converting the proceeds from such deals into assets acquired for 327 group companies.

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