Satyam boss did divert company funds to Maytas

Raju confesses to channeling Satyam funds to family-owned real estate interests and falsifying bank documents

  • E-Mail
By  Mark Sutton Published  January 22, 2009

Satyam CEO B Ramalinga Raju did divert funds from the services company to family-owned Maytas, according to a report in the Economic Times.

Citing police sources, the Indian newspaper said that Raju confessed to police late on Wednesday that he diverted funds from Satyam to two branches of Maytas over the last four or five years.

Maytas Properties and Maytas Infra, which have both come under scrutiny, are partly-owned by several members of the Raju family, including the disgraced CEO and his brother, Rama Raju, who was MD of Satyam. Both companies have previously denied receiving funds from Satyam.

The alleged confession would be in contradiction to Raju’s original statement that the company invented $1 billion of assets and cash in accounts, and that the money only existed on paper.

The Economic Times says that a substantial amount of the money was used to invest in real estate around Hyderabad. Maytas Properties is believed to have built up a significant portfolio of prime real estate in the city in recent years, including around 7,000 acres of land.

Raju is thought to have used a Mauritius-based company to transfer money to Maytas since 2004. The report also claims that the company founder submitted fake bank documents to auditors PWC and created 6,000 fake salary accounts to siphon off additional money from Satyam.

Raju has been under interrogation by Andhra Pradesh CID for the past four days, with a bail hearing set for today.

Full coverage

Satyam chief may have pocketed missing $1 billion
No government bail out for Satyam
Satyam reaching out to customers in Middle East
New board appointed to resuscitate Satyam
Satyam CEO and MD arrested
Satyam chairman admits falsifying accounts

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code