Satyam Scandal: Raju Brothers in Custody; CFO Vadlamani Arrested

Hyderabad/New Delhi
Satyam Scandal: Raju Brothers in Custody; CFO Vadlamani Arrested
outlookindia.com
-0001-11-30T00:00:00+0553

 Satyam's founder Ramalinga Raju and his brother Rama Raju were today sent to judicial custody for 14 days while the CFO Vadlamani Srinivas was picked up for questioning, as the government and regulator SEBI huddled in Delhi to put a new management together to run the IT company.

Raju, who three days ago disclosed a financial fraud in the company running into thousands of crores over several years, and his brother were produced before the 6th Chief Metropolitan Magistrate who remanded them to judicial custody till January 23, their lawyer Bharat Kumar said.

In Delhi, SEBI Chairman C B Bhave called on Corporate Affairs Minister Prem Chand Gupta to discuss coordinated action against Satyam - whose profits Raju admitted to inflating over the years - besides nominating new directors to the company's Board.

Gupta apprised Prime Minister Manmohan Singh on the developments. Andhra Pradesh Chief Minister Y S Rajasekhara Reddy too called Singh to update him on the Satyam front, which the government has said dented corporate India's image globally.

The Company Law Board also asked Satyam's interim management not to implement the decisions of the now-disbanded board, but allowed it to continue with the business.

"We have been asked by the Company Law Board not to implement the decisions of the Board... The team which was constituted recently is continuing its work," Satyam Head Global Marketing and Communications Hari Thalapalli said.

Inspector General of Police (CID) V S K Kaumudi said Satyam's CFO Vadlamani Srinivas has been picked up for questioning and interrogation was on in the DGP's office.

 The Raju siblings were held late last night and after several hours of quizzing were produced before a magistrate at the judges quarters in Secunderabad.

The magistrate on his own directed medical treatment to be provided to Raju, whose BP was fluctuating abnormally, according to Kumar. The authorities at Chanchalguda central prison will arrange Raju's health to be monitored constantly.

Raju, 54, had in the morning complained of chest pain and uneasiness, following which he was subjected to a medical check-up.

Kumar said he would file a petition on Monday for bailing out Raju, a resident of Hyderabad's posh Jubilee Hills. Asked on what grounds the bail would be filed, the lawyer said: "Those grounds will be stated in the bail petition."

After the magistrate's order, the Rajus were whisked away in a van with tinted glasses while police kept the media away by barricading the area.

A case has been filed against Raju under sections 120-b (criminal conspiracy), 406 (criminal breach of trust), 420 (cheating), 468 (forgery for cheating) and 477-a (fraudulent cancellation of securities) of IPC.

Raju had on Wednesday disclosed a financial fraud in the company to the tune of Rs 7,800 crore by inflating profits and showing fictitious assets where none existed. The company's scrip has fallen nearly 80 per cent since the revelation.

Teams from SEBI and Serious Fraud Investigation Office of Corporate Affairs Ministry are camping in Hyderabad to probe Satyam executives. The police have asked them to seek court permission to quiz Raju.

Chartered accountants regulator ICAI today issued show- cause notice to Satyam's auditor Price Waterhouse on the accounts fudging. "We have asked PwC to reply within 21 days," ICAI President Ved Jain said.

 

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