For 7 yrs, accounts ‘managed,’ papers hidden: Satyam top brass tell cops

Posted: Feb 07, 2009
The interrogation of six prime suspects in the Satyam scam — currently lodged in Hyderabad’s Chanchalguda Jail — including that of its founder Ramalinga Raju has given investigators crucial clues that, taken together, show how India Inc’s biggest fraud was scripted over seven years. And involved an elaborate cover-up operation, according to interrogation reports accessed by The Indian Express, in which top officials have claimed they were “instructed” to stash away property papers in locations across the city, including garages and even a sprawling mango orchard.

These interrogation ince been submitted by the Andhra Pradesh CID to the magistrate hearing the case in Hyderabad. Key are the testimonies of two of Raju’s top associates Satyam’s Chief Financial Officer Vadlamani Srinivasan and Datla Gopalakrishna Raju, General Manager of SRSR Advisory Services, a company promoted by Ramalinga Raju to manage his stakes in Satyam. Both Srinivasan and Datla Raju are lodged in cells next to Ramalinga Raju and their statements, investigators say, will be used as evidence.

During his interrogation, Ramalinga Raju has fleshed out his dramatic January 7 confession and admitted to how the fraud was scripted and why he came clean. For instance, he has said that since he built the company from scratch, he could not “bear the thought of it coming down” and his resignation from Satyam was the only way to “save the situation.”

His testimony begins with the admission, “We wanted to show more income in the accounts to avoid others from involving in company affairs and any possible hostile acquisition. This continued for seven years and the margin amount got increased much more year after year...I have raised an amount of Rs 1,230 crore by pledging the shares held by our family and inducted the amount into Satyam Computers. But I could not fill up the deficit.”

He has also confessed to the opposition he faced to the takeover of his sons’ firm, Myatas Properties, which eventually resulted in the scam becoming public.

“I have tried to takeover Maytas Properties to cover up the deficit since the same has immovable properties,” he is quoted as having said. “Some of the Board of Directors did not agree and shareholders also expressed themselves against the said proposal because of which the proposal had to be dropped. Because of the present global financial situation, the disparities shown in the balance sheet, it became difficult to cover up and things have gone out of control.”