The Enforcement Directorate (ED) on Thursday issued provisional attachment orders with respect to fixed deposits worth Rs. 822-crore held by the B. Ramalinga Raju-owned Satyam Computer in four banks — the Andhra Bank, the Bank of Baroda, the IDBI Bank and the ING Vysya Bank.
The fixed deposits constitute proceeds of the crime being investigated by the Central Bureau of Investigation (CBI) and also forms a part of the scheduled offences under the Prevention of Money Laundering Act (PMLA), which the ED enforces exclusively.
This is the third instalment of properties attached by the ED since the Rs. 14-000 crore accounting fraud in Satyam Computer came to light in January 2009. The agency has already taken possession of 354 properties worth Rs. 250-crore that were attached in the earlier instalments and confirmed by the adjudicating authority under the PMLA.
Thursday’s provisional attachment, the ED said, comprised money that “subsisted” with Satyam Computer and constituted a part of the loans running into Rs. 2,171.45-crore that were obtained by pledging shares of the company with an inflated value.
The shares in the names of Ramalinga Raju, his brother Rama Raju and their spouses were transferred to SRSR Holdings in which Raju’s family members were directors, and they were pledged with inflated value to non-banking finance companies to secure the loans. The shares were also sold at opportune times.
The loans were circuitously transferred to 327 front companies floated by Raju to disguise the true source of the funds. The front companies used these loans to buy properties in Hyderabad, Ranga Reddy, Medak, Bangalore, Nagpur and Chennai. A part of the loans were also transferred to Satyam Computer, the ED said.
The first attachment of properties by the ED took place in August 2009. Then 10,000 acres split into 287 properties, worth Rs. 170-crore, and 34 lakh shares with a market value of Rs. 36-crore in the name of SRSR Holdings, which conducted complex financial transactions, were seized. The properties were benami holdings in the names of 132 individuals other than the Raju brothers and their companies. A two-member bench of the adjudicating authority ordered them to immediately give up possession of the properties in January 2010.
The remaining 67 properties worth Rs. 44-crore were attached in November and confirmed by the adjudicating authority subsequently.
The attachments by the ED is parallel to the interim attachments sought by CBI on Satyam properties acquired before the PMLA came into force in July 2005. The CBI has moved a civil court here to attach the properties as per the Criminal Law Amendment Ordinance, 1944. The CBI will seek regularisation of attachment after the conviction in Satyam case was granted.