The Hindu Business Line : Satyam overstated headcount numbers, says CID counsel

Muster roll padding
CID counsel alleged that the management siphoned off Rs 20 crore a month payable as salaries through fictitious accounts
HDFC Bank says deposits shown with it in the audit report were fake

– Mohammed Yousuf

More quizzing: Sleuths escorting former chairman of Satyam Computer Services, Mr B. Ramalinga Raju, and former Chief Financial Officer, Mr Vadlamani Srinivas, in Hyderabad on Thursday. The 6th Additional Chief Metropolitan Magistrate approved extension of police’s Criminal Investigation Department custody till 4 p.m. on Friday.

Our Bureau

Hyderabad, Jan 22 As the saga of ‘fudging and manipulations’ of finances by Mr B. Ramalinga Raju, the ex-Chairman of the Rs 7,136- crore scam hit Satyam Computer Services, unfolds, huge overstating of staff numbers, diversion of funds to acquire lands, forged bank documents and insider trading have come to light.

The fourth largest IT major that always boasted of a head count of 53,000 had in reality only 40,000 on record. To top it, the erstwhile promoter’s and management, siphoned off money, at an average of Rs 20 crore a month payable as salaries through fictitious accounts, for at least five years.

Enough evidence was also emerging on large scale fund diversion and fictitious bank deposits to the tune of Rs 3,360 crore.

These are some of the key submissions made by legal counsel for the Crime Investigation Department (CID), Andhra Pradesh. Many more disclosures had also come to light during the 4-day custodial interrogation of Mr Raju, Mr Rama Raju (ex CEO of Satyam) and Mr V. Srinivas (ex CFO).

“Over Rs 7,000 crore has been diverted from the company causing loss to a large number of small investors. The diverted funds have been used by Mr Raju (according to his own revelation during the interrogation) to acquire land in 400 benami names of persons and companies,” Mr K. Ajay Kumar, Counsel for the CID said.

The possibility of insider trading by the promoters could not be ruled out, he submitted to the Court, while seeking extension of custody for two more days of Mr Raju and Mr V. Srinivas (ex CFO).

He pointed out that one Mr Akula Rajaiah (a real estate broker) was instrumental in 400 land transactions.

Banks & Auditors

“We have received letters of confirmation from HDFC Bank, Basheerbagh, Hyderabad, that the deposits shown in the bank in the auditing reports were fake,” Mr Ajay Kumar said.

The forged bank documents were submitted to the statutory auditors, who certified the financial reports, he argued.

“The treacherous minds and master brains behind this multifarious fraud need to be found which required time,” he contended.

False accounts with funds have also been found in the names of Mr Ramalinga Raju’s brother, Mr G. Suryanarayana Raju, and mother, Mrs Appala Narsamma. The Court also granted a day’s extension of the custody of Mr Raju and Mr Srinivas. It, however, sent Mr Rama Raju to judicial remand.

The plea of SEBI to interrogate Mr Raju as well as the bail and special status petitions have been posted for Friday.

Counsel for the accused argued that many documents that were seized by various investigating agencies on January 11 were also not called for during interrogation. It never consulted SEBI and RoC for documents which were in their possession.

‘No funds diversion’

Mr Ramalinga Raju’s lawyer, Mr Bharat Kumar, today termed as “unfortunate” reports that there was diversion of funds by Raju brothers from Satyam.

The media have been covering this issue extensively well within their rights “but it is very unfortunate that a section of media is carrying absolutely distorted facts, versions regarding the investigations depicting certain issues without any basis,” Mr Bharat Kumar told reporters after the court’s proceedings here, reports PTI.

Related Stories:
Controversy over staff on the rolls
Rs 7,000-crore fraud

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