India's market regulator Wednesday grilled Satyam Computer Services founder B Ramalinga Raju and his brother B Rama Raju in Chanchalguda Central Jail in Hyderabad over the Rs.70-billion (Rs.7,000-crore/$1.43-billion) accounting fraud in the company.
A three-member team of the Securities and Exchange Board of India (SEBI), led by general manager and investigating authority Sunil Kumar, left the prison in the evening after the first day's questioning of the Raju brothers.
The team entered the jail around 10 a.m.
This was the first time that SEBI officials had access to Ramalinga Raju after he confessed to the fraud Jan 7 while quitting as the chairman of India's fourth largest IT services firm.
The Supreme Court Tuesday allowed the regulator to interrogate the brothers in jail Feb 4-6.
The SEBI officials, who carried a bunch of files into the jail, refused to talk to waiting journalists, or allow Raju's lawyer S. Bharat Kumar to be present during the interrogation.
Maintaining that it was unfair on SEBI's part not to allow the counsel of the accused during questioning, Bharat Kumar said he would approach the Supreme Court for "justice".
The SEBI officials reportedly questioned the Rajus on a range of issues, including suspected insider trading and diversion of Satyam's funds to companies promoted by the family.
The market watchdog served summons on the Raju brothers to appear before SEBI team Jan 9, and the two agreed to a meeting the next day. However, a few hours later, they surrendered before the Andhra Pradesh police.
SEBI then approached a magisterial court to seek permission to record their statements but the petition was dismissed Jan 23.
SEBI challenged the order in the Andhra Pradesh High Court last week. Appearing for SEBI, Solicitor General of India Goolam E. Vahanvati prayed for an ex-parte interim order to question the accused.
However, the high court refused to pass such an order without hearing the Rajus, and set Feb 9 for the hearing.
A frustrated SEBI then approached the Supreme Court, which gave its nod for the questioning.
Meanwhile, the Criminal Investigation Department (CID) of the Andhra Pradesh police, which is also probing the fraud, Wednesday began grilling two former auditors of Satyam.
CID officials went to Chanchalguda jail and took custody of S. Gopalakrishnan, who was chief relationship partner at Satyam's auditors PricewaterHouseCoopers, and Srinivas Talluri, who was engagement leader. They were brought to the CID office, where they were questioned through the day.
A city court Tuesday sent the duo to police custody for two days - Wednesday and Thursday.
In another development, fresh bail petitions for the Raju brothers and Satyam's former chief financial officer Vadlamani Srinivas were moved before the sixth additional chief metropolitan magistrate D. Ramakrishna.
The hearing on the petitions will begin Feb 6.
The judge Jan 28 rejected the bail plea of the three and extended their judicial custody till Feb 7.