The first judgment in the Rs.14,000-crore Satyam Computer accounting scandal that shook the corporate world six years ago was delivered by an economic offences court here when it sentenced the then company chairman B. Ramalinga Raju, his brother and managing director B. Rama Raju and two others to six months’ imprisonment in the cases filed by the Serious Fraud Investigation Office (SFIO) of the Ministry of Corporate Affairs under the Companies Act.
The court also imposed fines of different amounts to 11 individuals who figured in the seven cases filed by the SFIO. The highest fine of Rs. 2.66 crore payable in two months was for Krishna G. Palepu, a director then.
The court struck down one case and restricted the sentence to mere fine in two others. In the remaining four cases, imprisonment was awarded to the Raju brothers, whole time director Ram Mynampati and chief financial officer Srinivas Vadlamani. All the accused, except Mr. Palepu, were present in the court when the verdict was pronounced by the judge K. Laxman. However, the operation of the imprisonment and fine was suspended for a month to enable the accused to appeal in a higher court.
In the seven cases filed by the SFIO, the court struck down the one related to the company showing non-existing profit of Rs. 1,715.75 crore when the actual loss was Rs. 44.43 crore. The company distributed dividend without prior approval of the Central government.
The cases where the sentence was restricted to a fine of Rs. five lakh each on the accused related to balance sheets for 2006-07 and 2007-08 where professional charges were paid to Mr. Krishna Palepu in addition to his normal salary without the opinion of the Centre considering his qualifications. Incomplete particulars in balance sheets were pointed out in the other case.
The accused were awarded imprisonment for merely disclosing amounts of dividend remitted in foreign currencies without identifying the number of non-resident shareholders, failure to disclose information about payments to auditors on taxation and company law matters, lack of details about employees in balance sheets from 2003 to 2008 and giving distorted figures of profit and loss.
