Andhra Pradesh police begin probe into Satyam fraud

The crime branch of the Andhra Pradesh police today began probe into the Rs 70-bn accounting fraud in the city-based IT service firm Satyam Computer Services.

The crime branch of the Andhra Pradesh police on Friday began probe into the Rs 70-billion accounting fraud in the city-based IT service firm Satyam Computer Services, even as the market regulator continued its probe for the second consecutive day and summoned before it the company's former chairman.

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The Criminal Investigation Department's (CB-CID) team checked records at Satyam's headquarters here and spoke to associates of disgraced former chairman B. Ramalinga Raju to ascertain the veracity of his statement on the fraud.

While resigning as chairman of the firm Wednesday, Raju admitted that the company cooked its books resulting in an "inflated (non-existent) cash and bank balances" for several years.

Chief Minister YS Rajasekhara Reddy ordered the CB-CID probe Wednesday to "look at the criminal angle into the entire episode". Incidentally, the Congress government in the state has been criticised for being "soft" towards Ramalinga Raju.

Reddy told reporters in Chennai that the CB-CID was conducting an independent probe into the whole scandal.

Speculations of Raju's imminent arrest were doing rounds for the third day in a row but the police continued to maintain that they would not take any action unless they receive a specific complaint.

Raju's lawyer S Bharat Kumar told reporters he would appear before SEBI officials at Satyam headquarters at 4 pm on Saturday.

SEBI may also summon B Rama Raju and V Srinivas, who resigned as managing director and chief financial officer of the company respectively.