Investigating the truth on Satyam

1 Feb 2009, ET Bureau

Fraud-hit Satyam computer has no outstanding tax dues. Yet, chairman of Central Board of Direct Taxes (CBDT) N B Singh, who is retiring today, said that tax liabilities would be known only after a year when I-T department’s investigation will end. While talking to ET, Mr Singh talked about how the department was proceeding the investigation in Satyam computer’s case.
Excerpts

Let’s begin by asking you the I-T department’s ongoing investigation on Satyam fraud. Any outcome as yet?

It’s too early to get any results. We have centralised the investigation under one commissioner in Hyderabad. He and his team are now scrutinising each and every document related to the case. There are hundreds of benami (anonymous) bank accounts which were floated by the Satyam promoters. We attached some of them in the past.

What’s the time-line of the investigation process? Will it be wrapped up by two to three months?

No, it will take time. It’s a fraud of a huge scale, and it has been going on for about eight years or so. We will need at least a year to complete our investigation.

But a potential buyer of Satyam computer would like to know the company’s tax liabilities. Is there any tax outstanding? Also, if there has been an inflated profit as former Satyam chairman Ramalinga Raju claimed in his confession letter, will you return the excess tax amount?

If a new company takes over Satyam computer, it must take all liabilities as well. Those will include tax liabilities too. There has been no outstanding tax dues of Satyam, but we will be able to ascertain the quantum of liabilities only after a year or so when our investigation is over. Regarding any inflated profit being shown, I won’t go by the statement of R Raju. The statement must have been issued at his own convenience.

In 2002, you spotted some I-T frauds in Satyam, but did not act swiftly.

It’s very easy to point out the lapses. Yes, we did not go continue our investigation beyond a point as we did not anticipate such huge fraud.

But have you found any other instances where modus operandi of opening benami accounts to siphon off huge sum of money has been adopted?

Yes, we have already identified some cases. And the identification process is on.

Are there any big names?

I won’t be able to name the companies at this stage. But yes, some prominent companies have also come into our radar.