It is similar to Harshad Mehta case in magnitude: CBI
CBI has arrested nine accused
HYDERABAD: Exactly a year after the former chairman of Satyam Computers, B. Ramalinga Raju, admitted to the multi-crore accounting fraud, the Central Bureau of Investigation is making all-out efforts for bringing the accused to trial.
The CBI has filed a preliminary charge sheet running into 53,000 pages and documentary evidence of the fraud within three months after the arrest of Mr. Raju on January 9, 2009. It has also filed a supplementary charge sheet of further documents and evidence was submitted to the designated court on November 24. “It is similar in magnitude to the Harshad Mehta case which the agency investigated earlier,” CBI Deputy Inspector-General V.V. Lakshminarayana said.
It was on January 7 last year, corporate India woke up to a rude jolt in the form of a confession letter written by Mr. Raju to the erstwhile Satyam Board revealing how profits were inflated over a period of several years and how the widening gap between the actuals and those shown in the books “attained unmanageable proportions.” “It was like riding a tiger, not knowing how to get off without being eaten up,” he confessed.
The full magnitude of the scam, estimated to be around Rs. 7,136 crore, came out only after the then government headed by Y.S. Rajasekhara Reddy handed over the investigation to the CBI. The Reddy government initially dithered on approaching the premier investigation agency.
The CBI acted promptly in arresting the nine accused — Mr. Ramalinga Raju, B. Rama Raju and Suryanarayana Raju, chief financial officer Vadlamani Srinivas, auditors S. Gopalakrishnan and Srinivas Talluri, and senior finance department employees G. Ramakrishna, D. Venkatapathi Raju and Ch. Srisailam.
Billed as the biggest scandal that rocked corporate India, the Satyam episode changed the landscape of corporate governance, which analysts said, “literally changed the rules of the game forever.” It was not just fudging the accounts, but the Satyam episode has brought how Mr. Ramalinga Raju, the icon whose Satyam Computers was considered the second landmark after Charminar in Hyderabad, masterminded the creation of “fictitious and unreal” bank deposits and floated 300-plus subsidiaries to which the embezzled money was allegedly siphoned off for investments in real estate.
And, the authorities concerned are yet to ascertain the extent of land transactions made by Mr. Raju’s family which is alleged to have acquired vast tracts of land around the twin cities.
The Registration and Stamps department of the State is yet to come to terms with the land transactions of the family as well as the host of companies that were incorporated as 341 deals were registered in the name of Mr. Ramalinga Raju alone.
The fraud was also a wake-up call for auditors after the raids conducted on Price Waterhouse, the statutory auditor, which did not find any deficiencies in balance sheets that were doctored for several years. It was an eye-opener to banks revealing the ease with which fixed deposit documents can be forged and used for ulterior gains.
The biggest losers, however, were the independent directors of Satyam, reputed public figures with track record of holding several important portfolios, whose images suffered major dents in the aftermath of the fraud. Several of them, including M. Ramamohan Rao, the former dean of Indian School of Business (ISB), and the former Cabinet Secretary, T.R. Prasad, were forced to resign from their positions and some of them even faced the ignominy of being summoned by a local court.