Manipulated Satyam accounts for 7 yrs, confesses Raju
January, 12th 2009
In his first confession to the police, the beleaguered ex-chief of Satyam Technologies B Ramalinga Raju has said that the turn of events following his admission of fraud have been unexpected. Raju had owned up the falsification in the IT majors books.
Raju has disclosed that he manipulated the accounts so that the company could get more business and that margin of amounts in the books increased every year. He has also divulged that the companys books were manipulated for as many as seven years.
SEBI chief CB Bhave is expected to meet Prime Minster Manmohan Singh in the evening today where he will discuss the Satyam fraud and provide the details of the investigations into the case. SEBI is already coordinating with the Ministry of Corporate Affairs in connection with the case.
After days of troubles Satyam today had something to cheer about when media reports reported that government can come up with a bail out package for the IT major.
A court, on Monday, postponed the hearing of Raju brothers bail plea till January 16. Court also deferred the hearing of plea filed by police seeking the custody of Satyam ex-chief till January 16 as well.
Security Exchange Board of India (SEBI) had also filed an application in the court seeking permission to record Rajus statement as it has not questioned ex chief of Satyam yet. The court postponed hearing on SEBIs plea till January 16 as well.
Moving forward in their investigations into the case, CID, on Monday, started to probe Satyams bank accounts in India. The Andhar Pradesh investigating agency also filed for the custody of Raju brothers and former CFO of Satyam.
According to sources CID is also probing the role of board of directors and auditors in the biggest ever fraud in the India IT sector. CID believes that such a big fraud cannot be done by one single person.
The investigations moved forward today and CID is also investigating the fee that Satyam paid to Pricewaterhouse Coopers which reportedly was higher than what other Indian IT majors , Infosys and Wipro, paid for the auditing of their books.
On being asked about action taken by Institute of Chartered Accountants of India (ICAI) against PwC Minister for Corporate Affairs PC Gupta said, ICAI cannot take action against PwC overnightlet them follow the procedure if we find any mistake on their part we will take action.
The acting CEO of disgraced company Ram Mynampati was yesterday found to be receing more salary than Satyam founder Raju and all directors put together.
Meanwhile, the newly formed Satyam Board started its first meeting at the companys Hyderabad headquarters on Monday morning. On Sunday, the Ministry of Corporate Affairs had formed new Board with three directors including HDFC chief Deepak Parekh, former NASSCOM head Kiran Karnik and SEBI ex-member C Achuthan.
The newly formed Board is expected to chalk out the future course action of the fourth biggest Indian IT major. The Board is also expected to discuss the suitable person for the Chairmans post and appointment of other Directors if required. The Board is scheduled to brief the media in the evening. According to media reports HDFC chief Deepak Parekh is most likely to be elected for the top most.
Raju had earlier surrendered to Andhra Pradesh DGP and was in turn sent to CID custody. Ram Raju, brother of Ramalinga Raju, was also arrested by the investigating agency.
Both of the Raju brothers were slapped with charges of criminal conspiracy, cheating, use of forged documents, forgery and criminal breach of trust under the Indian Penal Code.
Raju had on Wednesday disclosed a financial fraud in the company to the tune of over Rs 7,000 crore by inflating profits and showing fictitious assets where none existed. The company's scrip has fallen nearly 80 percent since the revelation.