Satyam probe handed over to CBI

NEW DELHI/HYDERABAD - The central government has finally handed over the investigations into the Satyam fraud to the Central Bureau of Investigation (CBI).

‘CBI will look into all aspects of the investigation,’ Corporate Affairs Minister P.C. Gupta told reporters in New Delhi.

The centre’s move came following a request from the Andhra Pradesh government.

He added that the Serious Fraud Investigation Office (SFIO) and the Securities Exchange Board of India (SEBI) will continue with their respective investigations into the Rs.70-billion (Rs.7,000 crore) accounting fraud.

Earlier, Andhra Pradesh Home Minister K. Jana Reddy told reporters in Hyderabad that the state government had issued an order Feb 13, recommending CBI inquiry into the massive fraud.

Under fire from the opposition, Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy (YSR) Feb 9 wrote to Prime Minister Manmohan Singh, seeking CBI probe.

‘The Andhra Pradesh police and the state CB-CID (Crime Branch-Crime Investigation Department) will fully cooperate with the CBI once it takes over,’ he had said in the letter, the second in 10 days.

The chief minister in his earlier letter to the prime minister Jan 28 had stated that he was open to a CBI probe.

It was Jan 7 that Ramalinga Raju had shocked the corporate India by admitting Rs.70 billion fraud in the country’s fourth largest IT services company.

While resigning as the chairman, he confessed that he inflated company’s profits over the last several years. His brother B. Rama Raju also quit as the company’s executive director.

The same day, Andhra Pradesh government announced probe by CB-CID.

Raju brothers were taken into custody by CID on the evening of Jan 8 after they surrendered at the state police headquarters in Hyderabad. Cases of cheating, criminal conspiracy, falsification of records and forgery were booked against them.

CID arrested former chief financial officer Vadlamani Srinivas the next day. Later, police also arrested two officials of Pricewaterhouse, the firm that audited Satyam’s books.

All the five accused are presently lodged in Chanchalguda central jail in Hyderabad.

The Congress government came under sharp criticism from the opposition for handing over the probe to CID considering the fact that the company has operations across the country and in over 60 foreign countries and that the issue involves several central agencies.