Satyam: Raju's brother, four others get bail

The Andhra Pradesh high court on Tuesday granted bail to former Satyam managing director Rama Raju, former chief financial officer Vadlamani Srinivas and three others accused in the multi-crore rupee accounting scam.

Justice Raja Elango of the AP high court granted bails to Rama Raju, brother of Satyam founder Ramalinga Raju, Srinivas and three others former Satyam employees G Ramakrishna, Venkatapathi Raju and Ch Srisailam.

With this, all Satyam accused except B Ramalinga Raju have got bails from various courts on different occasions.

Last month, the AP high court had granted bail to former Pricewaterhouse (PwC) auditor S Gopalakrishnana and former internal auditor Prabhakara Gupta.

In February, the Supreme Court had granted bail to another PwC auditor Srinivas Talluri. A city court, in March last year, granted anticipatory bail to B Suryanarayana Raju, brother of Ramalinga Raju.

In January last year Satyam founder and the then chairman Ramalinga Raju and nine others were arrested after Raju had admitted to fudging the accounting books of the IT company.

Earlier, on Monday, Solicitor General of India Gopal Subrahmaniam has urged the Andhra Pradesh High Court not to grant bail to any of the key accused till the trial in Satyam scam is over.

Subrahmaniam urged the AP high court when the bail petitions filed by B Rama Raju, former Satyam chief financial officer Vadlamani Srinivas, for Satyam vice president (finance) G Ramakrishna and two other employees in the finance wing, Ch Srisailam and Venkatapathi Raju, came up for hearing.

Last week, the Central Bureau of Investigation said that Raju and his family members wrongfully gained Rs 2,743 crore (Rs 27.43 billion)

Discussing the Satyam fraud as a case study, CBI said Satyam inflated its cash balance to Rs 5,040 crore (Rs 50.40 bilion). CBI officials also said it had understated liability of Rs 1,230 crore (Rs 12.30 billion) and overstated debt by Rs 490 crore (Rs 4.9 billion).

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CBI had filed three chargesheets against Ramalinga Raju and some of his associates. These pertained to criminal conspiracy to defraud investors by fabricating invoices and documents.

Last year, Tech Mahindra acquired Satyam and renamed it as Mahindra Satyam.

The CBI findings had also revealed that the promoters had a 2.18 per cent stake as on December 2008, compared to 18.78 per cent in 1991. They earned Rs 767.73 crore (Rs 7.67 billion) by selling shares through benami transactions and brokers.

The promoters acquired 935 properties, of 5,757.30 acres, worth Rs 3,454.9 crore (Rs 34.54 billion). They acquired these properties during 1999-2008, according to CBI.

Under Ramalinga Raju, Satyam floated 327 companies and published inflated financials. These front companies purchased 6,000 acres of land, said CBI, adding Satyam had taken loans of Rs 1,230 crore from these companies, which were not even accounted in books.

Under the fictitious sales segment, CBI said from March 2003 to December 2008, about 7,561 invoices were found fake. All these fake invoices were directly inserted into the systems through Excel Porting (which was provided for bypassing the regular flow of invoices generation for emergency cases. However, this was misused).

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The investigation also revealed that Satyam had executed projects in the name of seven non-existent companies - Mobitel, Cellnet, E Care, Synony, Northsea, Autotech and Hargreaves.

On corporate governance, CBI found out that the company directors received handsome remunerations, stock options at Rs 2 against the market price of Rs 500.

The directors acted as mere rubber stamps and the promoters were always present to influence the decision.

Moreover, the promoters received a dividend of Rs 27.08 crore (Rs 270.8 billion) in 2007-08 and 2008-09. But the actual profit after adjustment of fake revenues was Rs 176.12 crore (Rs 1.76 billion) in 2007-08 and Rs 269.16 crore (Rs 2.69 billion) in 2008-09.

The investigating agency claimed they were not eligible for dividends according to Section 205 of the Company Law.