CBI seeks US help in Satyam scam: letter rogatory sent

U Sudhakar Reddy

The Central Investigation Bureau of Investigation (CBI) in the letter rogatory to be sent to the United States will ask the country to give details on fund diversion from Satyam Computer Services Limited to three companies based in the US.
Sources in the CBI said the former Satyam chief, Mr Raju, diverted Rs 42 crore from Satyam to three companies in the United States.
The CBI DIG, Mr Lakshmi Narayana, said, "we are going to send the letter rogatory within a week.The fund diversion aspect is being looked into."
Initially, the letter roga tory (communication l between courts of two countries) will be sent to the United States and Mauritius and later to four other countries.
The probing agency is also looking into the acquisition of nine compa nies by Satyam. An offi cial said, "the transactions of acquisitions of nine , companies in the US will be looked into."
The role of auditors involved in the scam will also be studied, the official added. "The property acquired by off-loading the shares will be . attached," said a senior t CBI official.

CBI raids Satyam offices

● POLICE IS TRYING TO ‘ELIMINATE’ THE RATS WHICH ARE GIVING RAJUS SLEEPLESS NIGHTS.
The CentralBureau of Investigation conducted fresh searches at several places in the city including the My Home Hub at Madhapur and seized several documents as evidence in the Satyam scam on Saturday.
CBI sleuths are also seeking details from 18 to 19 top executives of Satyam Computer Services on insider trading. Further, the CBI collected electronic evidence related to fudging of records through fake bank accounts, fictitious invoices and balance sheets. The ex-Satyam boss, Mr Ramalinga Raju, and his associates are being grilled by the CBI on various aspects of the scam. The interrogation continued on Saturday.
Investigators have written to revenue department MROs in various mandals for details of the land deals undertaken by theaccused. They are tracking the money trail to find out where it leads.
“We are checking how the internal auditors manipulated the records in their systems,” said an official. “We are also compiling the value of 1,500 properties.”Meanwhile, police is trying to ‘eliminate’ the rats which are giving sleepless nights to the Raju brothers and others lodged in the Central Crime Station lock up. Rat poison was put in the CCS lock up to get rid of bandicooots and other rodents.

Satyam Raju spends horrifying nigh with bandicoots in lockup

By U Sudhakar Reddy

Scurryingbandicoots and rats didn’t allow the ex-Satyam boss, Mr B. Ramalinga Raju, and his aides to sleep for a moment in the police lockup on Tuesday night.
Apart from the Raju brothers and the ex-CFO, Mr Vadlamani Srinivas, the auditors, Mr Gopalakrishnan and Mr T. Srinivas, were also lodged in the Central Crime Station lock up by the Central Bureau of Investigation.
It was nightmarish to say the least and the bleary-eyed men recounted the experience to their lawyers on Wednesday. Following this, the counsels rushed to the CBI and requested it to change the lock-up. However, the request was turned down for security reasons.
“The CCS facility is well guarded and secure but does not have any facilities,” said a senior police officer. This means that one has to grit one’s teeth and try to sleep as rats and bandicoots run all over the cell and probably over one’s body as well.
“The bandicoots are ferocious and they were almost shivering with fear,” said another police officer.
“There is no bed or any other facility.” The CBI had chosen the lockup for security reasons, but police officers themselves say that it is a highly depressing experience to be within it.
Though Mr Raju and his fellow accused were taken to the Dilkusha Guest house for questioning, they were taken back to the same lockup on Wednesday night too.
Meanwhile, CBI officials grilled the Raju brothers for the second day to get more details about the Satyam fraud. Sleuths asked them about fund diversion and sought to know how they bought lands after offloading the shares. They found out that there was regular insider trading in the company. Ramalinga Raju, and his aides to sleep for a moment in the police lockup on Tuesday night.
Apart from the Raju brothers and the ex-CFO, Mr Vadlamani Srinivas, the auditors, Mr Gopalakrishnan and Mr T. Srinivas, were also lodged in the Central Crime Station lock up by the Central Bureau of Investigation.
It was nightmarish to say the least and the bleary-eyed men recounted the experience to their lawyers on Wednesday. Following this, the counsels rushed to the CBI and requested it to change the lock-up. However, the request was turned down for security reasons.
“The CCS facility is well guarded and secure but does not have any facilities,” said a senior police officer. This means that one has to grit one’s teeth and try to sleep as rats and bandicoots run all over the cell and probably over one’s body as well.
“The bandicoots are ferocious and they were almost shivering with fear,” said another police officer.
“There is no bed or any other facility.” The CBI had chosen the lockup for security reasons, but police officers themselves say that it is a highly depressing experience to be within it.
Though Mr Raju and his fellow accused were taken to the Dilkusha Guest house for questioning, they were taken back to the same lockup on Wednesday night too.
Meanwhile, CBI officials grilled the Raju brothers for the second day to get more details about the Satyam fraud. Sleuths asked them about fund diversion and sought to know how they bought lands after offloading the shares. They found out that there was regular insider trading in the company.

Satyam Raju's New York link

NO EVIDENCE OF DISGRACED RAMALINGA RAJU HAVING FUDGED NUMBER OF EMPLOYEES

Satyam Com-puter Services had produced fake invoices to show that it had got more than Rs 5,000 crore from sale proceeds in New York, the Central Bureau of Investigation has found out.
The CBI team is also now probing whether the money was rerouted from the the United States when Satyam bought some foreign companies.
“Though Satyam didn’t have such high volume of business, it produced fictitious invoices to prove that it earned revenue,” said an investigating official. “The management claimed that they have put Rs 3,000 crore in fixed deposits which don’t exist.” He added that Satyam bought several companies in US and other countries and the CBI was focusing on nine of them prominently. “There is suspicion that the companies were bought at higher price and the remaining money may be rerouted back into the country,” he said.
The team is also probing into the Bahamas Island and South Africa links of Satyam fraud case apart from Mauritius fund diversion angle.
According to Mr Raju, the loans were taken from November 2006 to October 2008 by pledging the shares and Rs 194 crore was repaid to the companies.
However, police found in the investigations that the frontal companies were owned by the relatives of Mr Raju. However, the CBI has so far found no evidence regarding the allegation that the company exaggerated the number of employees.

Raju bought 3,800 acres

Udumula Sudhakar Reddy
23rd jan 2009
The CID has found out that ex-Satyam boss, Mr Ramalinga Raju, had transferred most of his shares in the company to his brother, Mr B. Suryanarayana Raju and mother, Mrs B. Appala Narsamma.
Further, sleuths informed the sixth additional metropolitan magistrate court that Mr Ramalinga Raju had confessed to purchasing huge tracts of lands in and around the city in his name as well as that of his family members by diverting funds.
The lands were purchased with the help of one Mr Akula Rajaiah, who is believed to have been the mediator.
CID officials who scrutinised land documents seized from the houses and offices of Mr Ramalinga Raju, his family and associate firms such as SRSR Holdings estimated that around 3,400 acres of land were purchased.
These lands had been bought up in the names of Mr Ramalinga Raju’s family members, companies and other benami identities. There were 478 acres in name of Mr Akula Rajaiah and 312 acres in names of Mr Suryanarayana Raju and Mrs Narasamma.
Lands had also been bought in the name of one Jayasree. CID officials are checking her links with Mr Ramalinga Raju.
Most of the lands were bought in 2006 and registrations were spread over many months. There were also some purchases in 2008.
“We have seized four boxes of documents from SRSR Holdings and SRSR Advisories,” said a CID official.
Officials said the modus operandi was very simple. Mr Rajaiah used to buy lands from farmers and get general power of attorney in his name. Later, he sold the lands to Mr Ramalinga Raju’s family.
“They also bough lands through government auctions as well as through realtors,” said the CID official.
Meanwhile, CID officials who visited Satyam Computer Services came face to face with the umpteen grievances of employees.
“The company had not paid the medical insurance premium for the employees and so they will not get treatment facilities,” said an investigator. “Older employees are nervous about the prospect of being sacked.” Meanwhile, raids are continuing in the Satyam Shivam Sundaram block where Mr Ramalinga Raju and front firms have houses and offices.

Raju land dealer held

Udumula Sudhakar Reddy
25th jan 2009
Ramalinga Raju’s brother ordered top aide to hide land documents
Mr D. Venkata Gopala Krishnam Raju, a top aide of Ramalinga Raju, has told police that he had been ordered to hide all original documents relating to land transactions.
He claimed to have the documents for every land purchase of the Raju family. According to his confession, he was instructed by Mr B. Suryanarayana Raju, the brother of the Satyam founder, Mr B. Ramalinga Raju, to hide the papers.
Mr D.V.G.K. Raju is general manager (administration and commercial) of SRSR Advisory Services Private Limited.
The documents which were seized after his arrest reveal that Mr Raju had been buying the land since 1992. The pace increased in 2000, and speeded up in 2006 and 2007.
CID sleuths seized five boxes of original land documents pertaining to 147 benami companies that are suffixed by Agro Farms and Green Fields Private Limited. Police also seized a CD containing statements of properties and polythene covers containing original share certificates. Most papers were seized from the house of Mr D.V.G.K Raju at Tulasi Apartment in Madhuranagar.
The documents were shifted from flats in Sundaram Block in Ramaraja Nagar, the guest house of Mr Suryanarayana Raju in Pet Basheerabad, Mango Garden belonging to Mr Ramalinga Raju at Pet Basheerabad, and Flat No. 308 of Manjari Apartments in Somajiguda and Flat No. 507 of Gulraj Apartments in Somajiguda.
“Mr Suryanarayana Raju personally came to the office and instructed me to shift and conceal documents. I and ano-ther colleague, Mr K.V.V. Krishnam Raju, general manager, shifted them in a involvement in the Satyam fraud on Friday.
The arrest was shown by the cops only after the family members of Mr Krishnam Raju complained to the State Human Rights Commission (SHRC) that he was missing since January 21.
The documents pertaining to property bought by Mr Krishna Reddy showed Mr Gopala Krishnam Raju as director of Fincity Investment. He was authorised to sell 750 sq.yd. and received cheque for Rs 4.5 crore.
Sources said Mr Gopala Krishnam Raju invoked the private attendance clause and stayed away at the time of presenting documents in the sub-registrar’s office at Banjara Hills.
As per the clause the seller or the buyer or both can claim exemption from physical appearance at the sub registrar office citing “genuine reasons.” The registering authority will have to go to the absent party to obtain thumb impressions and take a declaration of execution of deed with the other party.
Informed sources said other documents were also presented at the sub-registrar’s office making use of the private attendance clause on January 15.
In such a case the registering authority would have to run from one address to another to obtain thumb impressions of the sellers.
When the issue was brought to his notice, Mr Aravind Reddy said: “We will check if the due process was followed.”

Bank funds do not exist: SFIO

Udumula Sudhakar Reddy
24th jan 2009
I Officials are trying to locate where Rs 1,733 crore disappeared I The team began its probe into the scam on the basis of Reg- istrar of Com- panies report
The Serious Fraud Investigation Office has found that the New York branch of the Bank of Baroda did not have the Rs 1,733 crore shown in the records of Satyam Computer Services.
SFIO officials are now trying to find out where the money went. In a petition filed before the sixth additional chief metropolitan magistrate court on Friday, the SFIO said that the bank statement showed that the alleged ‘trial balance’ in current account number 00120559 was non-existent.
Trial balance is the final balance of each account after all expenditure has been calculated.
According to the SFIO, the ex-Satyam chairman, Mr B. Ramalinga Raju and his brother, Mr B. Rama Raju, were the key decision makers for utilisation of such funds. Hence it was neces sary to record their statements.
The SFIO asked the court to give permission to record the statement of the accused in six days as per section 240(2) of the Companies Act 1956.
However, the court refused to entertain the SFIO’s petition seeking permission to interrogate the Raju brothers and the former chief financial officer, Mr Vadlamnai Srinivas, and asked the agency to come back with the relevant sections.
The SFIO said it began the investigation into the Satyam scam on the basis of report submitted by the Registrar of Companies.
“Financial statements, statutory returns and other records of Satyam prima facie appear to contain serious misstatements,” it said in the petition. “An attempt was made to utilise the stated cash reserves of the company to acquire controlling interest in two other companies owned and controlled by persons closely related to the promoter director.”

CID finds Raju city land deals

Udumula Sudhakar Reddy
24th jan 2009
Crime Investi gation Department (CID) sleuths have ferreted out details of the land deals undertaken by Mr Ramalinga Raju, his family members and associated firms.
They are now trying to trace out the source of the funds used for these land transactions.
This newspaper has obtained exclusive access to the details of 487 acres of land purchased by Mr Raju in the name of several benami firms. These lands were bought in Ranga Reddy district between 2006 and 2007. Mr Ramalinga Raju and his family members had bought around 487 acres in the name of several benami companies. These plots were bought in Loyapalle and KB Pally of Manchal Manda in Ranga Reddy district from May 26, 2006, to April 2007. It was during the same period that massive insider trading of shares occurred.
The CID, which unearthed it, is now trying to trace the source of funds used in the land transactions.
On April 27, 2007, around 35 acres at Loyapalle was registered in the name of Mandamalika Greenlands, a benami firm of Mr Raju. The land was purchased from six farmers.
Aryaka Agro Farms bought 53 acres on August 22, 2006, and on May 26, 2006, Karaveera Agro Farms bought 47 acres, Gowrdhanagiri Agro 44.25 acres and Mrugasira Agro 50.37 acres. Mangalaprasta Agro and Ketumala Agro bought 52 acres and 45 acres respectively on June 3, 2006, and Vardhamanagiri bought 54 acres on August 22.
On September 20, Nagagiri Agro and Panchapadi Agro bought 54 acres each and Nandanagiri purchased 53 acres. The money for sale deed transaction was paid from Karur Vysha Bank in Jubilee Hills.
Nandanagiri Greenlands got 53 acres registered in its name in KBPally on September 20, 2006. It paid Rs 21.95 lakh as sale consideration through a cheque on account number 14511152370 of Karur Vyshya Bank.
The stamps and registration department also found that around 240 land transactions were undertaken in the name of Mr Raju alone in the State.

Raju brothers arrested finally

Udumula Sudhakar Reddy

10th jan 2009
The police arrested Mr B. Ramalinga Raju and his brother, Mr B. Rama Raju, late on Friday night for their multi-year Rs 8,000 crore scam. All the directors and chartered accountants of Satyam Computers and PricewaterhouseCooper have been named as accused.
The Satyam chief financial officer, Mr Srinivas Vadlamani, is likely to be arrested on Saturday, said the CID IGP, Mr V.S.K. Kaumudi.
The Rajus drove to the office of the director-general of police to surrender, but the police arrested them to show “tough action”.
The duo is likely to spend the night at the CID malkhana in the DGP’s office complex or at AC Guards and will be produced in front of a magistrate on Saturday.
The police moved after getting a complaint from one Ms Leena Mangat, a former bank employee in the city, sources told this newspaper. In her complaint which conveniently came at just the right time, Ms Mangat told the CID police that she held 200 Satyam shares and Mr Raju’s actions had cost her heavily.
The DGP, Mr S.S.P. Yadav, told this newspaper that cases had been filed under several sections of the IPC including: ? Section 120B, criminal conspiracy. Maximum punishment if convicted could be imprisonment for life or rigorous imprisonment for two years and more. ? Section 420, cheating and dishonestly inducing delivery of property. If convicted, the Rajus face jail up to seven years and a fine. ? Section 409, criminal breach of trust by public servant, or by banker, merchant or agent. If convicted the sentence is imprisonment for life or up to 10 years, besides fine. ? Section 471, fraudulently or dishonestly using as genuine a forged document.
? Section 468, forgery for purpose of cheating. Punishment is imprisonment upto seven years, besides fine.
An arrest under these sections does not preclude other investigations being conducted into the Rajus’ affairs simultaneously by other agencies. Asked whether Mr Raju will be permitted to appear before the Sebi team on Saturday, he said, “We will see how it has to be done.” Mr Kaumudi said that the Rajus stood to get 10 years in jail if convicted.
Since the offences involved are of serious nature, the Raju brothers may not be able to secure bail for at least 14 days. They will be able to move the bail petition only after the Sankranti holidays.
Though the CID conveniently got Ms Mangat’s complaint against Mr Raju just in time, it delayed taking any action.
Things began moving after the Chief Minister, Dr Y.S. Rajasekhar Reddy, returned from Chennai in the evening and convened a meeting with senior officials.
Sources said that Dr Reddy, under immense pressure to clean up the Satyam mess and save India Inc.’s face by showing tough action, gave an earful to senior police officials for not arresting the Rajus. His hand was apparently forced by the Centre which earlier disbanded Satyam’s board and began tightening the screws around Mr Raju.
Besides, sources said Dr Reddy felt hurt when the Opposition began linking his son Jaganmohan Reddy to the Rajus.
The meeting worked out the modalities for the arrest, following which police teams spread out to find the Rajus and located them at their farmhouse at Kompally.
The police drove up there and found to their surprise that the Rajus, armed with legal assistance, were willing to surrender.
The police officials discussed their next action with top officials following which the Raju brothers came to the DGP’s office with a battery of legal experts including Mr Ramalinga Raju’s personal lawyer, Mr S. Bharat Kumar and their aides.
The police barred mediapersons from entering the DGP’s office. The Rajus drove in a convoy of eight cars, four of them Mercedes Benz.
On hearing of the arrest, some investors reached the DGP’s office. One of them, Mr K. Shivashankar, said he had lost Rs 1 lakh in the market.

(with N.Vamsi Srinivas)

Raju is a 'C' class prisoner

Udumula Sudhakar Reddy
11th jan 2009
Raju brothers perhaps slept on the floor Sent to judicial custody till January 23
Mr B. Ramalinga Raju, who authored the Rs 8,000-crore scam at Satyam Computers, and his brother Mr B. Rama Raju perhaps slept on the floor of the Chanchalguda prison on Saturday with 30 persons accused of petty crimes like theft.
At the end of hours of interrogation by CID police and after being remanded to judicial custody till January 23, the Rajus slept on groundsheets and were provided with woollen blankets at the Chanchalguda jail admission barrack.
“They are lodged in the admission block along with 30 other remand prisoners involved in various offences. There is no separate block for them,” said the Chanchalguda jail superintendent, Mr M. Chandrashekar.
“Our doctors examined them as per the magistrate’s order,” he said. A jail official said, “We did not give them food as they came after the end of supper time.” They may have eaten before they were brought to the jail, he said.
An official said, “They will be shifted out of the admission block on Sunday. We segregate them from those accused in violent offences like dacoities and robberies.” The Rajus will be treated as “C-class” prisoners, just like other prisoners, officials said. “Those involved in dowry harassment and cheating cases are categorised soft cases and put in separate barracks,” he said. That is where the Rajus will land up if their bail applications fails.
Earlier, the Rajus were produced before the sixth additional chief metropolitan magistrate at his residence in West Marredpally on Saturday evening, after 18 hours of grilling by the Crime Investigation Department. The magistrate, Mr Ramakrishna, remanded the Rajus to 14 days in judicial custody. The Rajus were brought to the judges quarters from the DGP office complex, where they spent Friday night, at about 5.45 pm. A group of supporters of Mr Raju heckled the media members there.
Mr A. Shivanarayana, the CID additional director-general of police, said, “We have filed a petition seeking police custody.” The police filed a 15-page remand report which included confession of both brothers. Mr Raju’s advocate, Mr S. Bharat Kumar, said, the Rajus had not filed any bail petition. “The case is posted for hearing on Monday. The police has asked the jail doctors to check the health of my clients,” he said. Mr Kumar told the magistrate that Mr Ramalinga Raju was not well.
Earlier, Mr Raju had complained of chest discomfort after he was arrested by the CID on Friday. In a change of practice, police called in doctors from a corporate hospital, instead of taking them there. The doctors said the Rajus’ BP and cholesterol levels were high.
The doctors said there was no need for hospitalisation.

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.

Raju bought land for sons

Udumula Sudhakar Reddy
13th jan 2009
The Crime Invest igation Department (CID) suspects that Satyam exboss Ramalinga Raju might have diverted the company funds for purchasing assets in companies floated by his sons.
CID sleuths termed the Satyam scam a “monumental fraud” while seeking custody of the Raju broth ers before the sixth additional chief metropolitan magistrate on Monday.
Police have impounded the passports of the Raju brothers as well as the exchief financial officer, Mr V. Srinivas, and are seeking details from banks to freeze their accounts.
The CID also felt that such a gigantic fraud could not have been perpetrated without the connivance of other directors.
According to the investigating officer, the deputy superintendent of police, Mr Balaji Rao, attempts were being made to trace the investments of Raju brothers in other companies.
In the written statement before the magistrate, Mr Balaji Rao said that the two “high profile brothers” had several offices in many foreign countries. “The investments and properties acquired by the accused in many countries are to be elicited,” he said. “They have accounts in various banks in India and abroad, all details have to be collected and scrutinised.” The CID said the brothers had admitted to Rs 8,000crore fraud and Mr Raju had also confessed that his family owned 100 acres of farmland in West Godavari, Krishna and Ranga Reddy districts apart from a grape garden of 20 acres in Ranga Reddy district.
In its remand diary, the CID alleged that the Raju brothers were responsible for fabrication of records and manipulation of accounts books of the company. “It is not possible for a single individual to commit such a massive fraud without the connivance of other directors,” the agency said. “The role of directors and chartered accountants has to be probed.” It turned out, however, that the CID has lifted news reports of banks declining to comment on freezing of Satyam accounts verbatim in the remand dairy.
CID officials have named as witnesses, Mr Karthik Sankaran, 36, a businessman and resident of Golconda Crossroads, Mr Abbas Hussain, 40, of Begumpet and Mr V. Narendar Reddy, a senior assistant in sub registrar office, as witnesses.
Meanwhile, Mr Anil Uttarwar, the head of Maytas Infra’s corporate communications, said that the claim of CID on Mr Raju diverting Satyam funds to companies of his son was false.

Maytas to be probed : Minister PC Gupta

Udumula Sudhakar Reddy
20th jan 2009
The Centre has extended its ongoing probe into the Satyam fraud to cover Maytas Infra and Maytas Properties promoted by the family of Mr B. Ramalinga Raju.
The development came after investigators in Hyderabad reported that the Maytas firms had got hundreds of crores of rupees from a Mauritius-based entity, and that it was alleged by investigating agencies at Satyam funds were used to finance Maytas land purchases.
“The government has approved and authorised the SFIO (Serious Fraud Investigation Office) inspectors to obtain such books, records, papers as they deem necessary from Maytas Properties and Maytas Infra,” the corporate affairs minister, Mr Prem Chand Gupta, told reporters in Delhi.
The SFIO investigation will cover all aspects whether they are directors, board members, banks, creditors, debtors and “whenever they (investigators) feel there is doubt in their mind, they can always expand (scope of probe) it.”
Meanwhile, Mr P.K. Madhav, the chief executive officer of Maytas Infra, resigned on Monday. He is already facing charges in a case relating to defaulting of payments by Nagarjuna Finance, where he was previously employed.
The minister said, “inspectors investigating the matters relating to Satyam have informed about the apparent nexus between the events that have taken place in Satyam and Maytas Properties and Maytas Infra.” On whether the government would supercede the board of Maytas Infra — Maytas Properties is a privately held firm — Mr Gupta said, “whatever is required, government would definitely look into that.” The SFIO has already found that there is huge flow of funds, estimated at hundreds of crores of rupees, from a Mauritius-based firm into Maytas Infra. They are now in the process of tracking how the funds moved.
SFIO officials inspected the account books and documents of eight companies including Maytas Infra and Maytas Properties which are owned by Mr Raju and his family. An official of SFIO said, “Our report says that it is suspected Satyam money was diverted to purchase land for Maytas companies.
The six other companies are not of much interest for us. They are either merged or taken over by Satyam.
SFIO sources said hundreds of crores of money has been pumped into Maytas from Mauritius.
Meanwhile, sleuths of Enforcement Directorate and Directorate of Revenue Intelligence sleuths met Registrar of Companies and sought details on the Satyam case.
Sleuths are also looking into hawala angle in the entire episode.

SFIO to check 60 Satyam servers

Udumula Sudhakar Reddy
16th jan 2009
‘ SFIO will col- lect details from RBI and Director of ‘ Revenue Intel- ligence on export earnings.
Cyber forensic experts of the Serious Fraud Investigation Office (SFIO) will be checking around 60 servers of Satyam in various spots around the world including London and Budapest.
Satyam has clients in around 65 countries and SFIO officials want to check each server for vital clues. “It is a big task,” said an investigating official.
On Thursday, SFIO sleuths conducted searches in the offices of Satyam at Begumpet and Madhapur. The SFIO team led by the additional director, Mr K.V.S. Singh, also exchanged notes with the Crime Investigation Depart ment team lead by Mr V.S.K. Kaumudi at the office of the director-general of police.
Sources said the documents and other materials seized by the CID team will now be examined by the new auditors, KPMG and Deloitte. An official of Hyderabad Registrar of Companies said that since the ministry of corporate affairs had ordered the SFIO probe under Section 235 and 237 of Companies Act, Satyam would have to allow investigators to access all information.
“The corporate veil has been lifted and there will be no secrecy,” said the source. “Bankers and auditors will have to cooperate too. The client confidentially clause cannot be cited.” SFIO is now focusing mainly on how the ex-chairman, Mr Ramalinga Raju, manipulated balance sheets and whether there was insider trading and diversion of funds. The CID team is meanwhile engrossed in seizing as many as documents of Satyam as possible. SFIO will also be collecting details from RBI and Director of Revenue Intelli gence on export earnings. Meanwhile, the Satyam interim CEO, Mr Ram Mynampati, who is in the United States, told CID investigators who called him up that he would soon come back and cooperate with the probe. Mr Mynampati, who is also facing a probe, told the CID that he went to the US to meet a client.

CID raids Rajus find land documents

Udumula Sudhakar Reddy
22nd jan 2009
The CID has recovered 112 land documents and sale deeds covering hundreds of acres in the name of Mr Ramalinga Raju’s family and benami names during raids on SRSR Holdings at Jubilee Hills and SRSR Advisory Services Private Limited at Begumpet. The documents covered land in Nalgonda and Ranga Reddy districts.
CID sleuths on Wednesday night raided on the residence of relatives of Mr Ramalinga Raju in Rama Raja Nagar.
The SRSR group of firms is the holding company of the shares of the Rajus. There are seven companies in the name of SRSR, which is believed to stand for Satyanarayana Raju, Suryanarayana Raju. Mr Suryanarayana Raju is the brother of Mr Ramalinga Raju, and Mr Satyanarayana Raju, their relative.
The CID also found that SRSR Holdings Private Limited and SRSR Advisory Services were the part of promoter group of Maytas Infra Limited.
The raids were conducted based on the confessions by the Raju brothers and their aide, Mr Vadlamani Srinivas, former CFO of Satyam.
Following the raids the CID has filed a petition in the CID court seeking extension of police custody of Mr Ramalinga Raju and Mr Srinivas. The police dropped the name of Mr Rama Raju.
The trio has to be produced before the sixth additional chief metropolitan magistrate court on Thursday when their police custody ends. Officials of the HDFC Bank, Basheerbagh branch, have written to the CID saying that they have not issued a certificate to Satyam Computers regarding bank deposits. The purported HDFC Bank certificate was found in the file of Satyam auditors.
This is the first proof of the widely-held suspicion that Satyam Computers showed off forged fixed deposit certificates to claim assets that it did not have.
“Certain fixed deposit receipts and bank statements are stated to have been forged and fabricated. The HDFC letter confirms it,” said Mr Balaji Rao, CID DSP, in his petition to the sixth additional chief metropolitan magistrate court on Tuesday.
“We have written to other banks to establish the genuineness of deposit receipts and statements and are expecting reply in a day or two,” Mr Rao said. “The creation of bogus invoices, receipts and bank statements by the financial wing of the company is to be verified from the accused.” He said that Mr Ramalinga Raju and Mr Vadlamani Srinivas revealed details of “connivance and collusion of the auditors in fabricating the accounts,” Mr Rao said in the petition.
Mr Rao said documents had been seized during searches but more remained to be seized and scrutinised. The CID is also scrutinising the receipt of money from foreign sources to Mr Raju’s family and their associate companies.
“We have to find out the days on which shares were sold or pledged, and how the amounts were transferred,” a CID official said. “The dates on which the properties were bought have to be verified, as also where the money came from.” The CID is also examining whether the money was transferred through legal banking documents like cheques and drafts or through cash.
CID officials on Wednesday questioned Mr Gopalakrishna and Mr Srinivasa Rao of PricewaterhouseCoopers and let them off. Mr Rao stated in the petition that the medical check-up of the Rajus and breaks for lunch, tea and rest were eating into the time the police had for interrogation. He said, “I strongly believe that some personal computers of the accused have been secreted (away), hidden or destroyed to do away with evidence.”

Raju cleaned out bank account before fraud

Udumula Sudhakar Reddy
16th jan 2009
Satyam Computers’ ex-chairman, Mr B. Ramalinga Raju, withdrew all the money from his and his family’s personal accounts, even as it turned out that Satyam had no fixed deposits with ICICI Bank.
The non-existent fixed deposits were the foundation of Satyam’s muchhyped Rs 8,000-crore cash reserves.
As of Thursday, Mr Raju had Rs 6,184 in his account with HDFC Bank’s main branch at Lakdikapul. Two other accounts in his name hold no money.
According to sources in the CID, Mr Raju and his family members, Mr B. Rama Raju, Ms B. Radha Raju, Ms B. Nandini, and Ms B. Deepti hold 16 accounts in HDFC Bank. Only Ms Deepti holds a fixed deposit worth Rs 2.5 lakh.
One of the accounts has Rs 3,559, according to CID officials who are probing Mr Raju’s Rs 8,000 crore scam at Satyam. Some of the accounts actually show an overdraft. “We were shocked to see that their accounts were emptied,“ a CID officer told this newspaper. “We are tracing how the money moved in and out of the accounts. These details began coming out as the CID and the Serious Fraud Investigation Office experts began going through the bank accounts of Satyam and its promoters in various banks.
Police is also trying to track down another 40 accounts of Mr Raju and his family in different banks.
Sources said ICICI Bank had informed the police that the Satyam had no fixed deposits with them. The company has a current account and salary accounts of staff with the bank.
Mr Raju has claimed in his January 7 confession that he had shown fictitious bank deposits while cooking Satyam accounts. Police now suspects that the bank deposit certificates put up by Satyam were fake.
An investigating official said, “Satyam had produced some documents showing that it had bank deposits. We have to verify whether these certificates issued by banks are genuine or forged.” “If the bank certificates are forged, then bankers would have had no role,” the officer said. “But the auditors, PricewaterhouseCoopers, will be faulted as they did not crosscheck documents.” If the certificates are genuine, the auditors cannot be faulted, the official explained. Satyam could have deposited the money temporarily, collected certificates and then withdrawn the money. Even in that instance, the investigators will clear the bankers. The focus then will be on the Satyam promoters.
Investigators are also checking the tax deduction at source (TDS) certificates issued by banks on the interest earned on deposits.