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.

Crime Investigation Department sleuths raided houses of the Raju brothers in Jubilee Hills and Vadlamani’s residence at Habsiguda on Sunday.

Around 8am, five special teams of CID personnel reached the houses of the Rajus on Road Number 62, Jubilee Hills, and Vadlamani’s house on Street Number 3, Habsiguda, armed with search warrants. During the searches, the special teams, comprising CID and city police personnel, seized several documents and copied data from computers on the three premises. The CID is also working with SEBI and Registrar of Companies in the searches at Satyam’s offices in Hyderabad.

The CID sleuths said there were no raids on houses of the directors of the superseded board (the Centre named three new directors on Sunday) and none of them had been arrested.

 ”As part of the investigation, all persons or organisations involved in the Satyam case will be questioned. But so far, Satyam’s board of directors, independent directors and PwC personnel have not been questioned,” additional DG (CID) A Sivanarayana said.

Vadlamani, who was questioned by CID officials for nearly 18 hours, was produced before additional chief metropolitan magistrate P Ramakrishna on Sunday evening. He was remanded in judicial custody till January 23 and was shifted to the Chanchalguda jail.

Police have sought custody of Vadlamani and their petition will come up for hearing on Monday. The CID officials were tightlipped on the revelation. “Vadlamani has to be questioned further. So, we have moved a petition seeking his custody,” IG (CID) VSK Kaumudi said.

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