The sordid Satyam saga entered a crucial phase on Tuesday with the first trial proceeding in the Rs. 10,000-crore accounting scam beginning in a local court here.
The economic offences court, which took up one of the cases filed by the Serious Fraud Investigation office (SFIO) against Satyam founder B. Ramalinga Raju and other former directors of Satyam, now christened Mahindra Satyam, posted the case to July 2 for further hearing.
The court earlier ordered initiation of proceedings against 11 former directors of the company after splitting up the case separating Mr. Raju and Ram Mynampati, the company’s former interim CEO, as both of them could not attend court proceedings.
While Mr. Raju has been under treatment at the city-based Nizam’s Institute of Medical Sciences for hepatitis-C, Mr. Mynampati is an American citizen and lives there. However, Mr. Mynampati was represented by his counsel on Tuesday. Mr. Raju has not been attending the court proceedings since last September.
The trial began in the case no 395 in which Mr. Raju, B Rama Raju, former managing director of Satyam Vadlamani Srinivas, former CFO of Satyam and Mr. Mynampati are accused under Section 211 of the Companies Act. The SFIO accused them of not disclosing dividends paid to foreign investors in the company’s balance sheet and other reports.
According to the SIFO counsel C. Raghu, the court recorded the statement of SIFO assistant director Subhash Sarsonia, who investigated the case. The court also marked the documents related to annual reports of Satyam from 2002 to 2008.
“The company directors failed to show dividends paid to foreign investors in the balance sheet and other documents. All the directors who were on the board that time are responsible for the offence,” SIFO counsel Raghu argued.
The SFIO filed seven complaints against 11 directors, including former Cabinet Secretary TR Prasad, the ex-director of IIT, V.S. Raju, and the former dean of Indian School of Business (ISB) M. Rammohan Rao, in the Satyam fraud case in the special court for economic offences here last December.
The country’s biggest corporate scam came to light on January 6 last year when Mr. Raju admitted that he had been fudging the accounts of the company he founded.