ED files complaint of money-laundering against Satyam accused

B-42, DEL-050801 - AUGUST 5, 2009 - Hyderabad: Former Satyam Chairman Ramalinga Raju being taken to Nampally court for a hearing in connection with Satyam scam, from Chanchalguda jail in Hyderabad on Wednesday. PTI Photo

A new prosecution will begin in the nearly five-year-old Satyam Computer scam for criminal action against 47 persons and 166 corporate entities, headed by the former chairman B. Ramalinga Raju, on charges of money-laundering. The Enforcement Directorate filed a complaint in a court here on Monday and named the accused.

This will be in addition to 355 pieces of property of Raju and his family, totalling over 4,000 acres, worth Rs. 1,075 crore, which the ED acquired after passing attachment orders in six batches. The orders were confirmed by the adjudicating authority under the Prevention of Money Laundering Act (PMLA).

It took two years for the ED to launch criminal prosecution under the PMLA because it was not clear which court should be designated to handle the complaint. In normal circumstances, the ED was supposed to file the complaint in a Metropolitan Sessions Judge (MSJ) court, but the criminal aspect of the case, handled by the Central Bureau of Investigation was under a special court presided over by an Assistant Sessions Judge, who was lower in rank than the MSJ.

The law says the cases of both the CBI and the ED should be tried in the same court. Moreover, the Supreme Court made it clear that the CBI’s case be conducted daily. In order not to disrupt the trial in the special court, the agencies approached the Supreme Court, which left the matter to the High Court. The High Court designated the special court to receive the ED’s complaint because the judge was a competent authority, though he was junior to the MSJ.

In addition to the CBI and the ED, the Serious Fraud Investigation Office of the Ministry of Corporate Affairs is trying the erstwhile directors of the company, in an economic offences court for violation of the company law.

It is the ED’s case that Raju and his family held the “proceeds of crime,” acquired through the sale of 5.5 crore shares at an inflated value of Rs. 600 a share. The money was used to buy land and to pump money into the company. The 47 individuals named by the ED include five family members and 32 friends of Raju.