Satyam documents reveal huge fund transfers: CID

09 February 2009

Continuing its scrutiny of some 40 truckloads of documents in the Satyam Computer Services case, as well as electronic data that runs into terabytes recovered from personal laptops of Satyam founder B Ramalinga Raju his brother Rama Raju and former chief financial officer V Srinivas, along with the continued interrogation of key personnel, the Andhra Pradesh CID is uncovering more and more details of the modus operandi of the scam.

"The electronic data itself will take at least two months for our cyber experts to decipher. We have got all the land purchase and transactions records intact. We also have original bank statements which prove Raju's lies about fixed deposits," additional director general of police, CID, A Siva Narayana said. The CID's core investigation team has been joined by experts from the cyber crime cell and the AP State Forensic Laboratory. An official from Stamps and Registration office is helping the team in scrutinising the land records of the Raju family.

A member of the CID investigation team has that within 10 hours of his arrest on 9 January, Raju had revealed everything about the Satyam fraud: how he fudged the accounts from 2002 by inflating profits that started with Rs459 crore and reached Rs5,000 crore by 2007, though the equity remained at a constant of between 6 per cent to 6.2 per cent starting 2002, and forging bank certificates to show crores worth of non-existent fixed deposits in at least six banks.

The CID has also come across evidence of fund transfers which allowed the IT major to continue declaring huge profits and dividends to its shareholders, even though in a "confessional" statement on 7 January, Ramalinga Raju admitted to liabilities to the tune of Rs 1230 crore.

Raju had stated that this amount did not figure in Satyam's account books (or balance sheets) and that he had pledged all the family's promoter shares and raised funds from "known sources" to fill this yawning gap in accounts.

It now transpires that between 2006 and 2008, the company had been transferring huge funds back and forth between 10 "fund raising" companies floated by it along with 37 "front" companies - all ostensibly involved in the agro business. All these entities figure in the mega list of 327 companies, the antecedents and financial status of which are under scrutiny by various agencies, including the Serious Fraud Investigation Office (SFIO).