The police is seeking to question him, but Ram Mynampati has proved smarter: he has flown away.
The official spokesperson of Satyam Hari told TOI that Mynampati had left for the US on Sunday, January 11, to address the “concern” of clients. Hari was unable to say when the interim CEO appointed by Ramalinga Raju before he quit, would return. But analysts were askance. “How could somebody who was on the radar of the CID allowed to get away? Was the police looking the other way?” asked an analyst.
Mynampati, a whole time director of Satyam for the last two years, was the right hand man of Ramalinga Raju and controlled over 60% of Satyam’s business.”
What was the need for him to push off before meeting the new board and handing over charge to them? Something is fishy,” said a senior Satyam staffer.
Additional director general of police (CID) A Sivanarayana, when asked, said that he was not aware about Mynampati’s whereabouts. “In any case, he is not an accused. He will be questioned when he comes back,” the cop said.
On Tuesday, a nine member team of CID officials swooped on the office of Price Water House Coopers in upmarket Jubilee Hill and questioned partners S Gopalakrishnan and Talluri Srinivas. The sleuths also searched all the three floors of the posh office.
“It is a vast case with multiple dimensions. Right now the CID is focussing on Price Waterhouse Coopers,” IG, CID, V S K Kaumudi told The Times of India on Tuesday. “Our officials have seized important documents and copied data pertaining to the Satyam accounts from the Price Waterhouse Coopers office,” the cop added.
Though Ramalinga Raju has mentioned in his confession letter, that Satyam’s inflated profit was just to build investor confidence and no profits were made by insider trading by any of Satyam’s promoters, SEBI is still probing into the matter of insider trading.
Market regulator SEBI’s special team, set up to probe into the financial irregularities in Satyam Computers, has set its focus among other things on alleged ‘insider trading’ carried out by top executives in the IT firm in the recent past, sources said today.
“Our major concerns in this case include any insider trading activities that might have occurred in Satyam shares and all aspects of fraud committed in the company’s book,” Sebi sources told reporters here today.
The market regulator formed an investigation team soon after Ramalinga Raju confessed that he cooked the company’s balance sheet for seven years with inflated profit numbers and understated liabilities.
The three-member team, led by senior SEBI official A Sunilkumar, is understood to be progressing with its probe at Satyam headquarters in Hyderabad.
Congress leader Rahul Gandhi wants to show that no leniency or favoritism is being shown towards Ramalinga rajju, founder of Satyam and key accused in the Satyam scam.
Rahul Gandhi on Wednesday said he is “not too concerned” about Satyam Computer fraud in the long run as India has very deep strength in IT but wanted the “guilty should be punished.”
“On the one hand, the strength that we have in IT is a very deep strength. So with a long term view … in a long term perspective, I am not too concerned about Satyam development,” Gandhi replied to a query on how concerned he was about the Satyam Computers scam.
The task ahead for the new Satyam board is well cut out. In its first meeting in Hyderabad on Monday, the board will elect its chairman, New Satyam board membersand help find out a solution for creation of working capital and appoint new management of the company. The government on Sunday constituted a three-member board for Satyam. The members are HDFC chairman Deepak Parekh, former Nasscom president Kiran Karnik and former chief of Securities Appallate Tribunal C Achuthan.
The new board will meet with a mandate to ‘‘ take necessary immediate action to put the company back on the road,” taking it out of the present crisis, which started after its chairman B Ramalinga Raju revealed fudging of its accounts last week.
In its first meeting, the board is likely to elect Deepak Parekh as its chairman. It is learnt that the government has already sounded the members about Parekh as chairman. The other members will be appointed by the government with the consultation of the chairman and other appointed board members.
“I am going to Hyderabad for the board meeting tomorrow,” Parekh said. The first task of the board is to restore confidence in the clients and investors to continue business with Satyam, he said, refusing to answer any further question.
At present, Satyam has no cash reserves , despite the fact that the balance sheet prepared on March 31, 2008, shows a cash reserve of Rs 5,700 crore. To ensure smooth functioning of the company, a senior official said the company would require a new management, which could be trusted by clients and lenders, who have stopped giving Satyam money after the revealation of accounting fraud.
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While Ramalinga Raju’s purposeful 7000 crore fraud is of an unforgivable magnitude, the 53,000 employees do not have to be punished for no fault of theirs. The Government who is very concerned about these employees is even considering a bail out for Satyam, if needed.
Union Minister of State in PMO, Prithiviraj Chavan, said the Centre is at present concerned about the future of 50,000 employees of the disbaned Satyam.
Describing the Satyam scam as an “isolated case”, Chavan said the government will look whether its regulatory mechanism has failed somewhere.
“Inspite of our regulatory system, a crime has been committed by a determined CEO (of Satyam),” Chavan told reporters adding despite Banking regulatory, SEBI and Chartered Accounts, it was surprising that at no stage the scam could be detected.
Satyam’s chief financial officer (CFO) Vadlamani Srinivas on Sunday claimed that he had no knowledge of fudging of over Rs 7,000 crore by former chairman B Ramalinga Raju.
According to sources, Vadlamani in his confession stated he wasn’t aware of the fraud as his 80-member team provided him documents and he blindly signed on them. “Team gave me documents, I blindly signed”, says Satyam’s ex-CFO.
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.
On his part, Raju said “we wanted to show more income in the account to avoid others from involving in the company affairs and any other possible hostile takeover situation, and hence, manipulated the balance sheet to attract more business and show unavailable amount as available cash in hand”, said Raju.
With the accounts of Satyam having gone to the dogs, with the CEO having admitted his culinary skills in cooking the books of Satyam, the need of the time is to have an accounting firm verify the accounts of Satyam and bring to light whether the company was drawing in profits or was in a loss making scenario.
Satyam Computer Services will appoint a new accounting firm within the next 48 hours to work on restating the accounts and declare the December quarter earnings, a member of the new board said.
Working capital issues require immediate attention at the company, Deepak Parekh, a senior banker and one of the government appointees to Satyam’s board, told reporters after the first meeting of the newly constituted board.
A cartoon by Santa Banta on the Satyam Scam making rounds with email forwards:
Satyam Scam - Raju's new job as a cook
Ramalinga Raju who has been sent to jail and denied bail until 23rd January 2009, will have a huge list of eminent lawyers to defend him. This was announced by their lawyer S. Bharat Kumar Monday soon after a court adjourned the hearing on the bail petition of the disgraced former top brass of the company to Friday.
The court also adjourned the hearing on the petition of the Crime Investigation Department (CID) seeking their custody and another petition by market regulator Securities and Exchange Board of India (SEBI) seeking permission to question them for the massive fraud.
Additional Chief Metropolitan Magistrate D. Ramakrishna adjourned the hearing on all the three petitions to Friday.
Satyam’s founder and former chairman B. Ramalinga Raju, his brother and former managing director B. Rama Raju and former chief financial officer Vadlamani Srinivas were remanded to judicial custody till Jan 23. They have been kept at Chanchalguda Central Jail here.
Bharat Kumar told reporters outside the Nampally Metropolitan Court Complex that the judge adjourned the hearing to allow Ramalinga Raju to file a counter to the SEBI petition.
The Government certainly can not remain aloof and allow Satyam to die off especially when it provides occupation to 53,000 odd people and indirectly supports more than a million Indians. While it is debatable that whether the tax payers money be used to bail out a company which deliberately got involved in a scam.
The troubled Satyam Computer Services, facing a liquidity challenge, may get financial support from the government, which is willing to New Satyam board members consider “all aspects” of helping the crisis-ridden company, Commerce and Industry Minister Kamal Nath said on Monday.
Since it was a question of saving jobs and an international Indian brand, the government would consider all the proposals from the newly-constituted board, Nath said. When asked whether the government could extend even financial help to Satyam, Nath said, “Of course. There are many jobs at stake and institutional stakes.”
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