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Rediff News  All News  » Business » Open to CBI probe into Satyam fraud: Reddy tells PM

Open to CBI probe into Satyam fraud: Reddy tells PM

Last updated on: January 28, 2009 14:44 IST

Open to a CBI probe into the Satyam fraud, Andhra Pradesh chief minister Y S Rajasekhara Reddy told Prime Minister Manmohan Singh on Wednesday that the IT firm resorted to 'embellishment' of bank accounts for more than seven years.

"Investigation has so far revealed embellishment of bank accounts by the company for more than seven years to impress the clients within the country and overseas. . .

"Our government would welcome making over the case to CBI, if deemed appropriate," Reddy said in a letter to the prime minister.

Stressing a coordinated mechanism between the central agencies and departments like Securities and Exchange Board of India and the Serious Fraud Investigation Office, he said the scope of probe underway by the state government included Satyam's connection with the Maytas firms.

The Maytas firms are an infrastructure group promoted by the family members of Satyam's disgraced former chairman Ramalinga Raju.

In the letter, Reddy said the present political context just ahead of the general elections made the issue all the more sensational.

Copies of the letter have been sent to external affairs minister Pranab Mukherjee, who is now handling the finance portfolio also, and company affairs minister Prem Chand Gupta.

"The political parties naturally exploited the issue and made targeted attacks that the state government is interested in diluting the gravity of the case," he said, adding reports that also suggested that the required cooperation with central investigating agencies was wanting.

Outlining the investigation in the case registered by the state Criminal Investigation Department, he said the probe revealed that the inflation of current account balance by the company had been testified to by bank officials.

In addition, the company also raised money from NBFCs by pledging shares, he said.

"More than 300 Companies were also raised by the close relatives of Ramalinga Raju as directors/promoters and this facilitated insider trading of shares," Reddy said.

Reddy claimed that the state CID is regularly in touch with officers of SEBI, RoC and SFIO and held several rounds of discussions jointly.

Also, the director (investigation), Income Tax department, was informed about the searches from time to time and the department is associated in the investigations, he pointed out.

Referring to Maytas, he said the infrastructure companies have independently participated in different tenders as part of consortium with other companies and secured contracts for certain construction projects in the state.

"The scope of investigation includes a probe into any connecting link between Satyam and Maytas," he said.

Observing that the state government was sensitive to the concerns of the 50,000 IT professionals working with Satyam, he said "it is submitted that our government would welcome making over the case to CBI, if deemed appropriate.

"Though it is a complicated investigation, I am confident that the results of investigation will meet the requirement of justice and the accused will be brought to book," he added.

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