Satyam money was siphoned off, not inflated | business | Hindustan Times
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Satyam money was siphoned off, not inflated

Satyam's former chairman B Ramalinga Raju siphoned off the firm's revenues to acquire "controlling interest" in two of his own companies, a preliminary Govt probe report said. A Airy & G Choudhury report. Special Coverage | Listen to podcast

business Updated: Jan 17, 2009 01:45 IST

B Ramalinga Raju, disgraced chairman of Satyam Computer Services, siphoned off the technology giant’s revenues to acquire "controlling interest" in two of his own companies, a preliminary government investigation report said.

<b1>The findings are in stark contrast to Raju’s January 7 confession that said the company did not have cash reserves. "Neither me nor the managing director took even one rupee/dollar from the company and have not benefited in financial terms," he had said.

But preliminary investigations of the Registrar of Companies (RoC), a copy of which is with Hindustan Times, state that Raju and his accomplices had utilised the “cash reserves of the company to acquire controlling interest by purchase of shares in two other companies, owned and controlled by persons closely related to the promoter director of the company”.

While the RoC report did not name the companies, a senior official in the ministry of corporate affairs told HT that the companies were Maytas Infrastructure and Maytas Properties, both founded and promoted by the Raju family.

In fact, the Serious Fraud Investigation Office (SFIO), a multi-disciplinary quasi-judicial agency, has been specifically asked to find out whether “there was any siphoning of funds of the company”.

Hindustan Times was the first to report that the Andhra Pradesh government was planning to look at governance practices at Maytas Infrastructure, following the disclosure on Satyam.

The SFIO is also investigating “the existence and adequacy of internal financial controls and reporting within the company (Satyam) and lapses, if any”.

The ministry had suo motu asked the RoC to begin investigations into Satyam accounts on December 17, a day after the tech giant made an aborted attempt to acquire Maytas Infrastructure and Maytas Properties for an estimated $1.6 billion.

While the mandate to verify the details have been given to the SFIO, RoC’s prima facie investigations revealed that the company’s publicly stated accounts contain serious “misstatements” and do not “reflect a true and fair view of the state of affairs of the company.”