Investigating a fraud like the one at Satyam Computer Services is a daunting task. Not only is it time consuming but also needs a lot of expertise. However, in what is considered a remarkable feat, the Central Bureau of Investigation (CBI) managed to file its first chargesheet in the case within two months of starting the probe.
The government had ordered CBI probe into the Satyam case on February 16, 2009, and the investigating agency filed the chargesheet on April 7. According to CBI officials, this was possible because of a multi-disciplinary investigation team (MDIT).
In all, the CBI filed three chargesheets running into 650 pages and 3,500 supporting documents, comprising over 100,000 pages. It named 600 witnesses, but withdrew 225 as the facts in their case were already proved.
In stark contrast stands the black money case. The Supreme Court observed that the agencies involved in the three-year probe had not made any substantial progress.
In fact, Justice B Sudarshan Reddy of the apex court reportedly asked Solicitor General Gopal Subramanium, last month, why a special MDIT, comprising officials from the Research and Analysis Wing, Intelligence Bureau, CBI and the Enforcement Directorate (ED), should not be constituted by the court to investigate the case.
The government opposed the formation of a special investigating team. Nevertheless, the usefulness of an MDIT has been proved by the progress of the Satyam case, termed the biggest fraud in India’s corporate history.
The CBI had roped in auditors, bankers, cost accountants, cyber forensic experts, income tax officials and others to unearth the accounting fraud committed at the Hyderabad-based information technology company. Besides, it worked closely with the Securities and Exchange Board of India (Sebi), Serious Fraud Investigation Office (SFIO) and ED.
The officials of the investigating agencies are now confident that the Satyam case trial, which began on November 2, 2010, will be completed by July 31, by the deadline set by the Supreme Court.
“The judgment will also be delivered by this time,” an official told Business Standard, asserting that this could well be one of the fastest trials the country would see in a corporate fraud case.
A senior CBI official said, besides proving the effectiveness of an MDIT, the Satyam probe had improved the professional competence of the officers. As the investigation involved the provision of digital evidence, the officers were exposed to the cyber forensic science.
So far, the Additional Chief Metropolitan Magistrate (ACMM) court, set up to exclusively deal with the Satyam case, has examined 175 witnesses and marked 2,800 documents.
“No witness has turned hostile till now. All of them are sticking to what they have said during the investigation,” a CBI official said, adding that the Supreme Court cancelling the bail of Satyam founder B Ramalinga Raju and his associates was a “great achievement” for the agency.
“The main ground for pressing for cancellation of their bail was that they might influence witnesses — all of them Satyam employees,” a CBI sleuth said.
The CBI has charged the accused in the Satyam case with conspiracy, cheating, forgery, falsification of records and causing disappearance of evidence. On the other hand, ED is said to be ready to level charges of money laundering against the accused. But filing a case by ED is likely to derail the ongoing trial in the Satyam case.
A senior advocate told Business Standard if ED filed the money laundering case, the cases of both CBI and ED would have to be clubbed and filed before a designated court, which should conduct the trial “de nova”, or afresh.
According to Section 44 (I) A of the Prevention of Money Laundering (Amendment) Act, 2005, a designated court (a special court constituted for the area in which the offence has been committed) is a metropolitan sessions court headed by a sessions judge or an additional sessions judge. At present, the trial is being conducted by an ACMM, who can’t try a money laundering case.
“The government is seized of the matter,” a senior CBI official said, maintaining that the investigating agency had been careful to avoid the jurisdictional lap.
However, the Satyam case trial is likely to be prolonged if a de nova trial is imminent. It will not only lead to loss of time but also loss of enormous effort, besides some loss to the state exchequer.
The state government is incurring an additional expenditure of Rs 32.6 lakh by setting up a new ACMM court to exclusively deal with the case. The amount includes an annual recurring expenditure of Rs 27.6 lakh towards salaries of officers and staff, contingent expenditure of Rs 2 lakh and Rs 3 lakh towards “purchase of library and furniture”.
