SC acquits Ramalinga Raju's brother Srinivasa Raju
15 May 2018
The Supreme Court on Monday acquitted C Srinivasa Raju, co-brother of Satyam Computer Services Ltd chairman B Ramalinga Raju, from being treated as a promoter in Satyam Ccomputers, acquired by Tech Mahindra in 2009 (See: Tech Mahindra edges out L&T to acquire Satyam).
Srinivasa Raju had been charged, along with 13 others, of amassing nearly Rs2,000 crore, in the Satyam scam, regarded as one of the biggest corporate frauds that came to light in January 2009.
In a sudden move in January 2009, chairman Ramalinga Raju sent a letter to the investors and employees of Satyam Computers and the government, confessing to a Rs 7,136 crore fraud committed by him, his relatives and a few employees. (See: Satyam’s Raju admits to fraud and resigns
The Supreme Court said Srinivasa Raju was duped by the promoters of Satyam — Ramalinga Raju and his brother Rama Raju — who had named him as a promoter in various letters to stock exchanges without his consent and knowledge.
“The fact that appellant (Srinivasa Raju) was not involved with fraudulent manipulation is clear from the fact that he ceased to be an executive director in the year 2000, while fraudulent manipulation of the accounts began from 2001,” the judgement stated.
It cited as evidence the fact that Srinivasa Raju had retained a major part of his shares in Satyam Ccomputers 2008, while the promoters had disposed their holdings by 2006 as they were aware of the credit crunch the company was facing.
Srinivasa Raju had also revealed that he had been selling his stake in Satyam to fund his venture capital business and that he had not sold all shares at the same time, but only as and when his business needed the money.
The Supreme Court has also accepted that the manipulation of financial statements by promoters Ramalinga Raju and his cohorts was suppressed from the board of directors of the company. Accordingly, Srinivasa Raju, as a non-executive director was not involved in the day-to-day affairs of the company.