Probe panel finds evidence

Udumula Sudhakar Reddy
14th jan 2009
Centre orders SFIO to investigate Satyam fraud
The Serious Fraud Investigation Office (SFIO) has affirmed that the Satyam management led by Mr B. Ramalinga Raju was involved in conspiracy, criminal breach of trust, forgery, cheating and violations of the Companies Act and the Securities and Exchange Board of India (Sebi) rules.
Officials of the SFIO, which comes under the ministry of corporate affairs, found prima facie evidence of mammoth fraud during the inspections they carried out in Satyam offices on Tuesday.
The SFIO, set up in 2003, is a multi-disciplinary agency having experts from financial sector, capital market, accountancy, forensic audit, taxation, law, IT and investigation.
An SFIO team led by Mr Puneet Rastogi has been in the city from January 8. Sources said nearly half of the SFIO staff, including top experts, is part of the team. The SFIO additional director, Mr K.V.S. Singh and joint director (banking), Mr Sudhir D. Samant, also arrived in the city for the probe.
Meanwhile, the ministry issued a formal order under Section 235 and 237 of Companies Act to investigate the Satyam fraud case based on the preliminary report of the Registrar of Companies. The corporate affairs minister, Mr Prem Chand Gupta, said in Delhi the SFIO had been asked to submit its probe report in three months.
A senior official said it was clear that the Raju brothers and promoters forged documents and cheated the investors who lost Rs 10,000 crore in the market.
“They will be probed under Section 628 of Companies Act for falsification of balance sheet and under Sebi Act for fraudulent practices and insider trading,” he added.
“All of them — the broth ers, CFO and regular directors—will face prosecution.” However, the 20-member SFIO team in the city will not look into the assets and liabilities of Satyam and its promoters. It will be focused on the account books. An official said that SFIO will not make any arrests in the case.
“The CID will continue its probe and the court may merge both the cases when the charge-sheet is filed,” he added.
This is the first time the SFIO is taking up a case of this magnitude. It usually takes up cases of closed down companies.