Satyam Computer Services Limited, a dream destination for aspiring technocrats until the other day, is another example of how corporate bosses have lost their way, lured by short-term gains.
Simultaneous investigations have been launched by various agencies to unearth the multimillion-dollar fraud, the biggest in the countrys corporate history, and also to find out what made B. Ramalinga Raju fudge the accounts and turn to greener pastures, which included real estate.
The magnitude of the scandal prompted the Centre to order a probe by the Securities and Exchange Board of India (SEBI) and the Serious Fraud Investigation Office (SFIO), both under the Union Corporate Affairs Ministry. With a mandate to inquire into violation of regulations relating to insider trading, merchant banking, substantial acquisition of shares and takeovers and contracts, SEBI deputed a delegation to quiz Raju in police custody on January 9 night. But the former Satyam boss remained elusive for the market regulator even two weeks after he confessed to cooking the companys books, partly because of the stonewalling tactics adopted by the Andhra Pradesh government. Neither was an SFIO team, which stepped in following a preliminary report submitted by the Registrar of Companies on the magnitude of the irregularities, successful in meeting Raju.
There are widespread doubts about the role played by the State government and the police, as it is believed that a number of top political leaders had a vested interest in Satyam and its subsidiaries.
First, there was an inordinate delay in arresting Raju. It took a full three days after Raju made his incriminating statement for the government to give the police the go-ahead. The government also joined Rajus lawyers in opposing SEBIs application before the court to examine him.
The Crime Investigation Department (CID), too, kept him under continuing interrogation, not giving a chance to other agencies. This naturally led to the suspicion that the government was shielding Raju and not allowing facts to come out.
No doubt, the State police registered cases of criminal conspiracy, cheating, forgery and breach of trust (Indian Penal Code sections 120B, 406, 420, 467, 471, 477-A), but this failed to convince people that the investigation was on the right track. The unsuccessful attempts made by the SEBI and SFIO teams to meet Raju also brought out the fact that there was lack of coordination between the Central and State agencies.
The inquiries by the investigating agencies centre around the modus operandi of Raju, his brother B. Rama Raju and Satyams erstwhile chief financial officer Srinivas Vadlamani in diverting money without any questions being raised by the stakeholders.
The State government took a whole fortnight to concede that a direct link existed between Satyam and Maytas as the officials concerned and Chief Minister Y.S. Rajasekhara Reddy claimed all along that they were two independent entities and there was no connection between them.
That the Centres swift moves had their impact on the State government was evident from the fact that Rajasekhara Reddy admitted that the two companies were related and that investigation into affairs of one company (Satyam) will definitely lead to others [Maytas Properties and Maytas Infra].
The State police finally swung into action when it asked the Inspector General of Stamps and Registration Department to furnish the details of the landholdings of Rajus family as he had openly admitted that his firms held 6,800 acres, valued at over Rs.6,000 crore.M. Rajeev