The Central Bureau of Investigation (CBI) is set to quantify the hit that retail investors, mutual funds and foreign institutional investors (FIIs) took on their investments in scam-tainted Satyam Computer, following an erosion of the IT firms share price in January this year.
The magnitude of losses will feature in the second charge sheet, to be filed by the apex investigating agency, which now has proof that the IT firms defamed founder B Ramalinga Raju only made partial and selective disclosures on the scam to capital market regulator SEBI and stock exchanges. The additional charge sheet is set to focus on fund diversion and establishing the money trail.
We have sought information from Sebi on losses borne by retail investors on their investments in Satyam, following a fall in the share price in January this year. We are also eliciting information from mutual funds and FIIs, said CBI V Lakshminarayana, who heads the multi-disciplinary team probing the Satyam fraud.
Several institutional investors and banks have made huge mark-to-market losses on their investments in the erstwhile Satyam Computers.
The CBI had assessed the losses to the countrys biggest domestic investor Life Insurance Corporation (LIC) and banks in its first charge sheet. While LIC took a hit of around Rs 948 crore, a clutch of banks, including UCO Bank, Punjab National Bank, Union Bank of India, Allahabad Bank, Indian Bank and Oriental Bank of Commerce, suffered losses of around Rs 10 crore.
The CBI filed the first charge sheet in April this year, exactly three months after Raju scripted his fall. The premier agency confirmed that Raju had fudged accounts with eight others accused in Indias biggest corporate fraud, but remained silent on the diversion of funds from the IT firm that many feel lies at the heart of the scam.
The promoter is understood to siphoned-off money to tax havens and re-routed them into the country through several front companies. The CBI has already sent letters rogatory to several countries, including Mauritius, to establish the fund trail.
The first phase of investigation revealed that the fraud was orchestrated between 2001 and 2009. Initially, the companys results were manipulated by the accused to show heavy profits and keep share prices artificially high. During this phase, the promoters intelligently offloaded the shares of their family members, making a neat Rs 715 crore and lowering their stake.
This was an outright fraud on other stakeholders, including retail investors. Satyam was run like a proprietorship concern, throwing corporate governance to the winds. The promoters, charged of criminal conspiracy, deceived investors and made wrongful gains for themselves, the CBI had said. Raju and his family have lost control over Satyam. Tech Mahindra is the new owner of the Hyderabad-based outsourcer.