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Rediff News  All News  » Business » Andhra CM seeks CBI probe into Satyam scam

Andhra CM seeks CBI probe into Satyam scam

February 10, 2009 01:55 IST

Andhra Pradesh Chief Minister Y S Rajasekhara Reddy on Monday requested Prime Minister Manmohan Singh to order a CBI inquiry into the Satyam Computer Services fraud case so that "coordination with various investigating agenciesÂ… can be better achieved".

In a letter to the Prime Minister, Reddy said though the CB-CID had been in constant touch with other investigating agencies, there were issues that needed to be looked into by central government organisations such as the Income Tax department, Enforcement Directorate, Registrar of Companies, Ministry of Company Affairs, Serious Fraud Investigation Office and the Securities and Exchange Board of India.

The investigation so far has revealed that Satyam had inflated its bank accounts for many years. This inflation of the current account balance has been testified by bank officials concerned.

In addition, the firm has raised money from non-banking financial companies by pledging shares.

More than 300 firms were reportedly raised by Satyam founder B Ramalinga Raju and his close relatives as directors and promoters and this facilitated insider trading of shares, the Chief Minister said. "The Andhra Pradesh police and the state CB-CID will fully cooperate with the CBI once it takes over," he said in the letter.

Earlier in the day, Telugu Desam Party president and Leader of the Opposition in the Andhra Pradesh Legislative Assembly N Chandrababu Naidu had demanded an inquiry by a sitting judge into the Satyam scam.

He contended that the state CB-CID did not have the expertise, reach and capacity to probe the Rs 7,800-crore fraud case as the IT company had operations in 66 countries. Initiating a short discussion in the House on 'Satyam & Maytas issues' today, he charged the state government with trying to cover up the "biggest corporate fraud" and obstruct investigation by Sebi and SFIO.

Normally, the accused in fraud cases would be taken into police custody for investigation, but in the Satyam case "they were happily sent to judicial custody," Naidu said, adding that the state government had been trying to suppress facts. The state government was also afraid of handing over the case to the CBI as the Chief Minister and Raju had "close links", Naidu said.

He also alleged that the money 'siphoned off' from Satyam had come to the companies of the chief minister and his family.