Srinivas Vadlamani, chief financial officer of Satyam Computer Services Ltd., was remanded to judicial custody after the revelation of a $1 billion fraud in the Indian software company.
Vadlamani will be in custody until Jan. 23, Inspector General V.S.K. Kaumudi said by telephone from Hyderabad today. A magistrate yesterday remanded Satyam founder Ramalinga Raju and his brother Rama to judicial custody until Jan. 23.
A police petition to get custody of the Raju brothers and Vadlamani will be heard in court tomorrow, Kaumudi said.
India’s federal government named a new three-member board today to run Satyam after its founder was arrested in the nation’s biggest corporate fraud.
Satyam CFO Srinivas Vadlamani confesses, blames Raju
HYDERABAD: Satyam Computer Services CFO Srinivas Vadlamani on Monday blamed the firm's statutory auditors Pricewaterhouse Coopers and the disgraced New Satyam board members |
In his confessional statement to the police, Srinivas said the auditors never pointed out any "deficiencies" during their discussions. But the most startling revelation was that fixed deposits were unreal and fictitious which were managed with an understanding between the audit section and management.
"The bank deposits were handled directly by Raju and he was specifically asked not to look into it", Srinivas said. This was corroborated in Raju's confessional statement which said "myself and my brother used to take decisions and instruct our CFO to do as instructed". He admitted that the accounts were manipulated about seven years.
His confession is perhaps a pointer to the fact that the promoters could have forged bank documents to show fictitious deposits. This puts a question on the possible involvement of banks in the scam.
Those who should have a pretty clear idea by now are the software company's main bankers -- ICICI Bank, Bank of Baroda, BNP Paribas, Citibank, HDFC Bank and HSBC.
In the normal course, Satyam's statutory Auditor PricewaterhouseCoopers would have demanded certificates from banks attesting to the existence of money in the IT firm's accounts. Did the banks indeed certify that they had the money? Or were certificates forged and presented to PricewaterhouseCoopers?
Srinivas has pointed fingers at his assistant Rama Krishna who has been working him for about ten years. "Prior to quarterly board meetings Ramakrishna will prepare balance sheet with the assistance of his team with internal employees. I do not pay much attention to the details of that balance sheet.
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