The Enforcement Direc-torate (ED) on Thursday attached fixed deposits of Rs 822 crore of the erstwhile Satyam Computer Services, kept with four banks. The move relates to a case under the Prevention of Money Laundering Act (PMLA) against the company’s promoter, B Ramalinga Raju, and others.
Earlier, the ED had attached four to five fixed assets with a book value of Rs 250 crore (estimated market value of Rs 2,000 crore) owned by Ramalinga Raju and his family in Andhra Pradesh, Karnataka, Maharashtra and Tamil Nadu. These had allegedly been bought with money sourced through laundering. The ED had also attached a number of company shares.
In 2009, after Satyam Computer Services was acquired by Mahindra group company Tech Mahindra, it was renamed Mahindra Satyam.
| THE LAW AND RAJU How the Satyam saga unfolded |
| Jan 7, 2009 B Ramalinga Raju admits to committing an accounting fraud |
| Jan 9, 2009 CID wing of the Andhra Pradesh police dept arrests Raju |
| Apr 7, 2009 Central Bureau of Investigation files the first chargesheet against Raju and others. ED registers a case under PML Act |
| 2009-10 ED attaches 354 properties valued around Rs 250 crore (book value) with an estimated market value of Rs 2,000 crore bought by Raju and his family members |
| Oct 18, 2012 ED attaches fixed deposits worth Rs 822 crore after it found that similar amount out of Rs 2,171.45-crore loans obtained through share pledging was routed to Satyam Computer |
The Central Bureau of Investigation had filed chargesheets in the case in 2009. People in the know said the Supreme Court had authorised the ED to act on the fixed deposits of Satyam, now controlled by Mahindra Satyam.
An ED official said with Thursday’s move, the process of attaching assets in the case had ended. To contest the attachment, Mahindra Satyam would have to approach the adjudicating authority under the PMLA, which is expected to deliver a ruling in 150 days from the date of filing of an appeal.
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Officials said they had served the attachment orders on Andhra Bank, Bank of Baroda, IDBI Bank and ING Vysya Bank, adding they had also informed Mahindra Satyam, as well as the accused, of this.
Confirming the receipt of the provisional attachment orders from the joint director of ED (south zone), Mahindra Satyam Chief Financial Officer Vasant Krishnan said, “We wish to reassure all our stakeholders the company has sufficient liquidity to meet its obligations and this development shall in no way hinder or impair the ability of the company to carry on its day-to-day operations.”
“B Ramalinga Raju, who knew the true state of the finances in Satyam, got the shares of the company held by him and his family members off-loaded at opportune times and gained wrongfully. Off-loading of inflated shares of Satyam occurred by way of sale or pledging of shares,” read an ED release.
Subsequent transactions
According to the ED note, all shares held in the name of Ramalinga Raju, brother B Rama Raju, wife B Nandini Raju and sister-in-law B Radha Raju were transferred to SRSR Holdings, a company in which the four were directors. This firm, in turn, pledged the shares with non-banking financial companies and secured loans of Rs 2,171.45 crore, based on the inflated value of Satyam shares. To conceal the source of funds, these loans were circuitously transferred among the 327 front companies floated by Raju, his relatives and his associates.
While the majority of these funds was used to buy properties in Andhra Pradesh, Karnataka, Maharashtra and Tamil Nadu, the trail of loans derived from front companies also revealed Rs 822 crore of the total loans of Rs 2,171.45 crore found its way into Satyam and was used towards payment of salaries, etc, the ED said.
“Since this amount subsists with Satyam and constitutes a part of the loans derived or obtained by pledging of inflated Satyam shares, it falls within the mischief of proceeds of crime under the PMLA, and is liable for attachment,” it added.
The ED alleged between 2001 to 2008, Ramalinga Raju had conspired with the other accused and lured investors into buying shares of the company by continuously publishing falsified books of accounts, projecting healthy finances to ensure share prices remained inflated.