Satyam chief may have pocketed missing $1 billion

Satyam chairman may have siphoned off funds from Satyam rather than misreporting it, investigators say

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By  Mark Sutton Published  January 19, 2009

Satyam’s chairman, B Ramalinga Raju, may have pocketed the $1 billion dollars missing from Satyam’s books, rather than merely misreporting it, according to sources close to the ongoing investigation.

A New York Times report says that investigators have uncovered a “maze” of around 300 companies linked to Raju, that have been used to siphon off cash from Satyam.

The allegation appears to be supported by comments from Corporate Affairs Minister Prem Chand Gupta, who was quoted by a news agency as having said that “facts and figures stated in the balance sheets are not based on correct information… lot of wrong has been done”.

In his initial letter of resignation, Raju denied that either he or his brother, former Satyam MD Rama Raju, had profited from the accounting discrepancies, although investigators now believe this not to be the case.

Attention has turned to Maytas Properties and Maytas Infra, real estate and infrastructure companies, which are part owned by Raju and other Satyam stake holders. The Satyam board proposed a $1.6 billion acquisition of Maytas, but this was abandoned after a shareholders revolt. Maytas’ holdings in land have increased rapidly in recent years, to include some 7,000 acres around Hyderbad, while the infrastructure arm is involved in high profile projects in a number of Indian states.

The Raju brothers and former Satyam CFO Srinivas Vadlamani were all transferred into the custody of CID for questioning yesterday, although they have a bail hearing set to take place today.

Raju initially resigned after revealing that he had falsified company accounts for seven years, inventing company reserves of $1 billion, and misreporting profits and revenues.

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3209 days ago
PAP

Once released on bail the brothers three will be gone without trace unless all assets are frozen.. Can wait to read the continuing saga of SATYAM its like a poor soap

3221 days ago
hiro bachani

dear sir, alongwith the main culprits at satyam- we should really punish the auditors, for failing to do their public duty honestly. We normally trust and invest in companies which have been audited by the top 10 companies of the world. Now, how can we invest in such companies even if they have been audited by pricewaterhouse or whoever. - regards- hiro bachani- mg. director- http://www.merlin-me.com

3227 days ago
PAP

It won’t be long before we read all three have slipped away to some tropical island to enjoy their ill gotten gains. The Indian government as a matter of principle would be wise to impound all their assets and bank accounts until fully satisfied where the $1billon has gone. Remember it’s hard working shareholders and investors who they have embezzled from not a SATYAM company. pap

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