Accounts, transactions of 356 more entities to be scrutinised | business | Hindustan Times
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Accounts, transactions of 356 more entities to be scrutinised

The government widened the scope of investigations into corporate India’s biggest fraud and mandated the Serious Frauds Investigations Office to scrutinise the accounts and transactions of as many as 356 entities as it seeks to unravel the alleged multi-billion-dollar Satyam Computers scam, report Gaurav Choudhury and Mahua Venkatesh.

business Updated: Feb 07, 2009 14:09 IST

The government on Friday widened the scope of investigations into corporate India’s biggest fraud and mandated the Serious Frauds Investigations Office (SFIO) to scrutinise the accounts and transactions of as many as 356 entities as it seeks to unravel the alleged multi-billion-dollar Satyam Computers scam.

“These companies and individuals are all linked to Satyam Computers or the Raju family,” said PC Gupta, Minister of Corporate Affairs. “SFIO will look into all companies and individuals to trail possible diversion of funds.” The SFIO was given the mandate to probe the matter last month.

Gupta did not give details of these entities but said 325 were companies, including the Bangalore arm of PriceWaterHouse, former statutory auditors of Satyam.

Preliminary investigations have established substantial evidence about how Satyam’s founder-chairman B. Ramalinga Raju and his accomplices might have set up a complex web of lesser known investment and financial companies to divert funds from Satyam.

The unlisted, family-owned Maytas Properties (MPL), for instance, had several transactions with group companies in the form of inter-corporate investments, advances and loans. “Against a paid-up capital of Rs 5 lakh, MPL had made an investment of Rs 90.25 crore and loans and advances of Rs 419.63 crore,” an official, said requesting anonymity. Adding MPL also received Rs 600 crore by way of unsecured loans from some of these 356 companies.

The complex financial engineering has come to light after sleuths of the Registrar of Companies seized documents — including an ‘Investment Register’, an ‘Insider Trading Register’ and a ‘Register of Contracts, Companies and Firms’— from different premises of the firm.

“I do not want to take any names,” Gupta said when asked for a list of companies. The minister also said there was nothing unusual in Satyam’s newly appointed CEO A.S. Murty’s decision to sell 40,000 shares of the company last month. This apart, the government would also look into the accounts and records of over 150 other companies on random basis to ensure accounting norms and guidelines were strictly adhered to.