SC Dismisses ED Petition for Attachment of Satyam Computer's FDs Worth Rs822 Crore
Moneylife Digital Team 03 March 2021
The Supreme Court (SC) has dismissed a special leave petition (SLP) filed by the enforcement directorate (ED) for attaching fixed deposits (FDs) worth Rs822 crore of erstwhile Satyam Computer Services Ltd. 
 
In a regulatory filing, Tech Mahindra Ltd, who took over Satyam Computer Services in 2012, says, "The SC vide order dated 26 February 2021 has dismissed the SLP filed by the Directorate of Enforcement, Hyderabad, for provisional attachment of fixed deposits aggregating to Rs822 crore pursuant to Section 5(1) of Prevention of Money Laundering Act (PMLA), 2002, of erstwhile Satyam Computer Services."
 
In January 2018, the ED had attached FDs worth Rs822 crore of erstwhile Satyam Computer Services kept with four lenders Andhra Bank, Bank of Baroda, IDBI Bank and ING Vysya Bank. The action by the ED was related with a case filed against B Ramalinga Raju, founder-chairman of Satyam Computer Services, and others. The ED had also attached some fixed assets worth Rs250 crore owned by Ramalinga Raju and his family in Andhra Pradesh, Karnataka, Maharashtra, and Tamil Nadu. 
 
According to ED, Ramalinga Raju, his brother B Rama Raju, wife B Nandini Raju and sister-in-law B Radha Raju transferred their shares in Satyam Computer Services to SRSR Holdings, owned by them. SRSR Holdings pledged these shares with lenders and obtained loan worth Rs2,172 crore. To conceal source of funding, these loans were routed among 327 front companies floated by the family. Out of the total loans obtained by the Raju family, Rs822 crore found its way in Satyam Computer Services and were utilised for daily expenses and paying salaries of employees. 
 
In 2012, the ED had claimed that since this amount of Rs822 crore subsists with Satyam Computer Services and was obtained by pledging the company shares, it falls under the definition of mischief of proceeds under the PMLA and thus liable for attachment. 
 
However, the Supreme Court dismissed ED's petition filed against an order passed by the High Court of Hyderabad for Telangana and Andhra Pradesh. In December 2018, the HC had set aside ED's decision to provisionally attach these FDs worth Rs822 crore. 
 
Set up in 1987, Satyam Computer Services was India's fourth largest IT company by revenues when, in January 2009, its founder-chairman B Ramalinga Raju confessed to having mis-stated the company’s earnings of around Rs7,136 crore over several years by inflating revenues and underplaying liabilities.
 
The Union government stepped in and appointed a board, including HDFC chief Deepak Parekh and Kiran Karnik, former president of NASSCOM, to find a buyer for Satyam Computer Services. 
 
Auto-maker Mahindra & Mahindra (M&M)'s unit Tech Mahindra, outbid Larsen & Toubro Ltd (L&T) and private equity (PE) WL Ross to buy controlling stake in Satyam Computer Services for about Rs2,900 crore.  
 
Comments
tillan2k
1 year ago
why SC is not keen on protecting the honor of Billionaire Rogue like some subordinate Court ?
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