Internal auditor faces charges in Satyam scandal
Police reveal new charge sheet and extent of fraud at Indian computer giant
Ramalinga Raju
India’s notorious Satyam Computer Services scandal has taken a turn for the
worse, with the country’s Central Bureau of Investigation (CBI) laying new
charges against 10 defendants regarding fake invoices, inflated revenues,
unauthorised loans and attempted cover ups.
These come in a new 200-page charge sheet with 1,549 additional documents and
301 additional witnesses, filed on November 25, before the city court in
Hyderabad.
The CBI, (referring to the accused collectively in an official communiqué),
has laid charges of creating fake invoices to inflate revenues by US$94 million
and forging company board resolutions to obtain unauthorised loans worth US$265
million.
This followed the arrest on November 21 of the company’s former global head
of internal audit V S Prabhakar Gupta, who has been charged with “willful
suppression of auditing irregularities.” The accused include Satyam Computer
Services ex-chairman Ramalinga Raju, former managing director Rama Raju, former
chief financial officer Vadlamani Srinivas.
In the charge sheet CBI claims to have quantified the evidence about the
wrongful gains made by the accused 10 and have identified 1,065 assets worth
US$76 million acquired by them.
The investigative agency also claims to have collected more evidence against
PricewaterhouseCoopers’ two auditors Subramani Gopalakrishnan and Talluri
Srinivas, who have already been charged with ‘knowingly certifying forged and
inflated balance sheets’. “Further evidence collected revealed the role of two
statutory auditors in the fraud,” said the CBI communiqué.
Furthermore, the CBI said that it has in new evidence “brought out” the
conspiracy amongst the accused to cover up the accounting scam in Satyam
Computers through the acquisition of Maytas Properties – Raju’s family owned
company – and in the process cheating the investors of other companies.
The first charge sheet was filed in March this year against nine accused of
the company, now called ‘Mahindra Satyam’ after been sold to fellow IT services
firm Tech Mahindra.
Commenting on the future course of action, the CBI official disclosed that it
is contemplating to file more charge sheets pertaining to the diversion of funds
and filing of income tax returns.
