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Updated: November 21, 2009 19:58 IST

Key Satyam fraud accused arrested

N. Rahul
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Chartered Accountant, Vontimitta Suryanarayana Prabhakara Gupta, is being produced before the special court by the CBI after he was arrested in Hyderabad on Saturday. Photo:Mohammed Yousuf
Chartered Accountant, Vontimitta Suryanarayana Prabhakara Gupta, is being produced before the special court by the CBI after he was arrested in Hyderabad on Saturday. Photo:Mohammed Yousuf

A few days ahead of filing the supplementary charge sheet in the Satyam Computers fraud, the Central Bureau of Investigation (CBI) on Saturday arrested a key figure in the scam who is the global head of the internal audit team of the company.

The CBI produced the 55-year-old V.S. Prabhakar Gupta in court which remanded him to judicial custody till November 26 to synchronise with the expiry of the remand of the other accused in the case. Mr. Gupta is the tenth accused in the case and the fourth chartered accountant to be arrested. Except former chairman B. Ramalinga Raju who is in hospital and his brother Suryanarayana Raju who was granted bail, all the other accused are in jail.

The head of the Multi-Disciplinary Investigation Team (MDIT) of CBI V.V. Lakshminarayana was non-committal when asked if some more persons were likely to be arrested in the case. He told The Hindu that the agency would file the supplementary charge sheet which would be a comprehensive document of investigation on Tuesday or Wednesday. The CBI filed the initial charge sheet on April 7 within 90 days of the arrest of Mr. Ramalinga Raju and others.

Mr. Lakshminarayana said Gupta had connived with the conspirators in not raising his voice when there were indications of bungling of accounts by the management, particularly in creation of fictitious invoices. As the head of internal audit, Gupta did not resist the management when it denied access of software highlighting irregularities to an independent audit committee. The lapses were detected by sub-teams of internal audit department.

The remand report of CBI submitted to court also said Gupta failed to inform audit committee grave irregularities pointed out by his team members. In fact, he directed his teams to close observations raised by them. He failed to adhere to provisions of manual for internal audit and standards laid down for the job.

The defence counsel prayed that Mr. Gupta acted as per the mandate given to him by the employer and the statutory auditors.

Gupta is the first person to be arrested after Tech Mahindra took over Satyam in mid April and the company was subsequently renamed Mahindra Satyam. He has continued in the same post even after the change in management.

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