Investigations into the financial irregularities in Satyam Computer Services Limited gathered steam on Saturday after disgraced Chairman B Ramalinga Raju was taken into judicial custody until January 23.
Raju and his brother B. Rama Raju, the company’s co-founder and managing director, were arrested on Friday night shortly after the government dissolved Satyam’s board of directors.
The former Chief Financial Officer of Satyam, V Srinivas, was arrested on Saturday.
The Raju Brothers have been has been booked under charges of criminal conspiracy, breach of trust, cheating, forgery and fraudulent cancellation of securities. They’ve been taken to the Central Jail at Changalguda. The Rajus’ counsel S. Bharat Kumar said his clients would be moving the court on Monday seeking bail.
In Delhi, Company Affairs Minister Premchand Gupta promised stern action against those found guilty in the Rs 7,000 crore scam. “All actions will be taken by the government in a coordinated manner. We will not spare the guilty,” he told reporters.
Late on Friday the government decided to pack the company’s board with 10 nominees. Gupta said the names of the government-nominated directors would be announced shortly.
There are indications that institutional investors and the Andhra Pradesh government are likely to make strong claims for representation on the reconstituted board.
A senior government official confirmed that the government had received a letter from Lazard Asset Management about representation on the new board, and said it was being looked into. Stock exchange data showed that Lazard held a 2.15 per cent stake in Satyam as on Sept. 30, 2008, although analysts said it could have raised the stake during the last few months.
“The situation is very fluid now and we are evaluating all possible options along with a membership in the board”, said a senior official of a private financial institution that continues to hold significant stake in the embattled company.
The Andhra Pradesh Police, which interrogated Raju for over 18 hours since arresting him last night, and stock markets regulator SEBI are expected to move the court on Monday seeking permission to interrogate him to unravel corporate India’s biggest fraud.