CBI charges Raju, others in fresh Rs430-crore scam

According to the CBI’s supplementary charge sheet, the accused created fake customers and generated invoices against them in order to inflate revenues of Satyam to the tune of Rs430 crore

The Central Bureau of Investigation (CBI) has charged Satyam Computer Services Ltd (Satyam) founder B Ramalinga Raju, his brother B Rama Raju and eight others with creating fictitious customers and siphoning off Rs430 crore from the IT company, reports PTI.

According to the supplementary charge sheet filed last month by the CBI, which probed the accounting scam in the company, the accused created fake customers and generated invoices against them in order to inflate revenues of Satyam to the tune of Rs430 crore, incurring expenditure to the tune of Rs65.90 crore.

"Adequate evidence has come on record to prove that the accused Rama Raju, Satyam employees G Ramakrishna, D Venkatpathy Raju and Srisailam have dishonestly and fraudulently conspired together to create seven fake customers in 2006 and got forged and fabricated invoices raised in the name of those customers to the tune of Rs430 crore in order to inflate the revenues of Satyam to that extent," the charge sheet said.

In order to inflate the account books, the accused created fake email IDs and sent mails on behalf of the seven customers to various associates of Satyam and urged them to continue the development of the products.

After an analysis of the emails, it was found out that the Internet Protocol addresses used for sending the mails were within Hyderabad, clearly revealing that the mails had not emanated from the seven foreign customers, the charge sheet said.


  • Like this story? Get our top stories by email.


    Vedanta seeks Orissa's help to restrict NGO movement

    Vedanta Group has alleged that NGOs like Survival International and Action Aid are instigating locals to go to hilltops and set up houses where the company has proposed to mine bauxite

    The Vedanta Group has asked the Orissa government to restrict entry of foreign non-governmental organisations (NGOs) in the area where it proposes to mine bauxite, as part of its $8-billion project in the State, alleging that these NGOs were instigating the local population.

    “These NGOs comprising Survival International and Action Aid are instigating locals to go to the hilltop, where we have proposed to mine bauxite, and set up houses.

    “The Orissa government has already said that there is no tribal population in the proposed mining site. Such efforts by these NGOs are aimed at harming the project and investments in the State at large, their movement has to be regulated," Vedanta Aluminium chief operating officer Mukesh Kumar told PTI.

    Vedanta Aluminium, a subsidiary of Vedanta Resources, has already written to the State's home ministry seeking restrictions on movement of such foreign nationals, besides investigation into their source of funding, he said.

    When contacted, Survival International's spokesperson said, "Survival International does not oppose industrial development. But where, as in this case, industrial projects take place on the land of indigenous people, they have a right to be consulted at the very least. Vedanta has not bothered to do this."

    On the contrary, the NGO said, the metal company has "launched an unprecedented attack on Survival International, apparently to drive its researchers out of an area where the company is planning to mine."

    However, Mr Kumar added, "They (the foreign NGOs) are the enemy of industrial development in the State. If such NGOs and foreign nationals have come on tourist visas, why are they camping in jungles of Kalahandi and Rayagada? They should go to places like Puri. If they do not abide by the rules, they should be sent back," he added.

    Mr Kumar said that the influx of foreigners has gained momentum after environment minister Jairam Ramesh instituted a probe into the allegations of illegal bauxite mining by the firm which is in a joint venture with Orissa Mining Corporation at Niyamgiri.

    When contacted, Action Aid Orissa head Dhandari Jaina said, "We are working for the cause of the most marginalised population. Everyone knows what we do and what we are doing."

    Vedanta has got an ‘in-principle’ approval from the State government to start mining at the proposed site. It is awaiting clearance from the Union environment ministry.

    Orissa steel and mines minister Raghunath Mohanty had said that "not a single family of Dangaria Kandha tribe lived at the proposed mining area, located between Rayagada and Kalahandi districts" and there would be no displacement.

    But the proposed mining project has reportedly been facing protests from locals and foreign NGOs over allegation of tribal displacement, contrary to Mr Mohanty's assertion.
    The green bench of the Supreme Court had last year given its approval to the project. Vedanta Resources has planned an investment of $8 billion (around Rs37,000 crore) across the State in power and aluminium projects.

  • Like this story? Get our top stories by email.


    DLF at it Again

    This cashless deal (worth Rs10,000 crore) is another case where a family-owned unit has been valued at a fancy price and dumped on a publicly-listed entity. But neither the regulator nor the investor community seem to care

    According to media reports, DLF is planning to acquire DLF Asset (DAL) through its wholly-owned subsidiary DLF Cyber City, which will buy Caraf, an investment firm owned by KP Singh and family which owns DAL. The deal is valued at Rs10,000 crore, which according to the company will consolidate all its commercial assets under DLF Cyber City.

    DLF Cyber City will issue fresh shares to the promoter family. Post this cashless acquisition, the promoter will own around 38% stake in DLF Cyber City and DLF’s stake will be reduced to 62% from 100% currently. DLF is set to list DAL on the Singapore Stock Exchange before March 2010. KP Singh and family are believed to have bought the shares through a hedge fund owned by DE Shaw for $500 million (around Rs 2,325 crore) in DAL last week. DAL has Rs7,300 crore in debts while the equity value is pegged at Rs2,500 crore.

    Clearly, the promoters of DLF are at it again. The media report is self-explanatory.  The questions are:
    1. If DE Shaw paid $400 million in 2006, why has the family bought back the same assets at $500 million in 2009? Surely, the real-estate markets have crashed considerably in the following three years and if anything, the stake could have been bought back at half the price, if not lower? And if this is going to be the benchmark for valuing the family-owned company (DAL) that is going to be merged into DLF, surely it is a scam.

    2. An ‘independent’ committee has been appointed to look into this so called re-structuring whereby another family-owned unit gets valued at a fancy price and gets dumped on a publicly-listed company. Will the committee ask the above question and more important, find out how many more such family owned ‘jewels’ are around which operate in the same sphere and will get dumped on the listed entities?

    When DLF came for the IPO, it had several ‘synergistic’ businesses like hotels, commercial complexes on rent, cinemas etc. which determined its high valuation. Now the strategy for dumping some of them (which were synergistic) is to apparently get out of ‘unrelated’ businesses. How does something synergistic yesterday become unrelated today is for the ‘independent’ directors to mull over.

    It is common knowledge that many promoters have umpteen companies that are used to siphon off money from listed vehicles. Instances like the one in the newspaper report above are sufficient grounds for any investor to dump the shares. How can one expect any fairness, so called ‘independent committees’ notwithstanding? Surely even Satyam had ‘independent’ committees. It is high time that every promoter makes a separate declaration about family owned/controlled entities which are going to get dumped on the listed vehicle.

    The sad part is that investors (institutional or rational ones) are not bothered about any of this. For them, governance does not matter one bit. Regulators are more worried about form-filling compliance and unless there is a public hue and cry, they do not have the competence or willingness to go beyond ‘legal’ compliance.

  • Like this story? Get our top stories by email.


    We are listening!

    Solve the equation and enter in the Captcha field.

    To continue

    Sign Up or Sign In


    To continue

    Sign Up or Sign In



    online financial advisory
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 3 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)
    FREE: Your Complete Family Record Book
    Keep all the Personal and Financial Details of You & Your Family. In One Place So That`s Its Easy for Anyone to Find Anytime
    We promise not to share your email id with anyone