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Rediff News  All News  » Business » SEBI chief, RBI to brief parliamentary panel on Satyam case

SEBI chief, RBI to brief parliamentary panel on Satyam case

January 26, 2009 20:29 IST
Security and Exchange Board of India, Chairman C B Bhave and representatives from the Reserve Bank and Corporate Affairs Ministry are likely to brief the Parliamentary standing committee on finance about the latest developments in the Satyam fraud case, at a meeting called on Wednesday to discuss the issue.

In addition to representatives of the SEBI and RBI, sources said, officials from the banking division of the finance ministry have also been called by the committee to give details of the Rs 7,800-crore Satyam fraud case.

The 30-member committee, headed by Bharatiya Janata Party member Ananth Kumar, according to sources, will try to ascertain the extent of the fraud, role of auditors and veracity of the letter of founder chairman Satyam computer services B Ramalinga Raju, who disclosed that the IT company was fudging accounts.

Besides, the committee would also try to find out whether any pressure was being exerted on the investigating agencies to cover up the fraud, amid speculation about the involvement of political personalities in the Satyam case and the other companies promoted by Raju's kin, like Maytas Infra and Maytas Properties.

In a bid to salvage the situation following admission of fraud by Raju, the government superseded the board of Satyam and appointed its own nominees on the board.

The new board has already asked leading auditing firms - KPMG and Deloitte - to re-state the accounts of the Satyam Computer in order to find out the true financial position of the company. The board's fourth meeting, scheduled for Monday was postponed, though no reasons were given for the same.

Apart from superseding the board of Satyam, the Ministry of Corporate Affairs had ordered an inquiry into the case by Serious Fraud Investigation Office and asked the Registrar of Companies, Hyderabad to inspect the accounts of eight related companies, including Maytas Infra and Maytas Properties.

The preliminary report of Hyderabad RoC, which is with MCA, has indicated the possibility of diversion or siphoning of funds by Raju.

The Company Law Board had already directed Raju, his brother Rama Raju and three other functionaries, including Ram Mynampati, Vadlamani Srinivas and company secretary G J Jayaraman, not to sell shares and other assets without the permission of the board.

In addition to the investigation by central agencies, the Satyam case is also being probed by Andhra Pradesh Central Investigation Department, which had arrested  B Ramalinga Raju, Rama Raju and Srinivas.

Meanwhile, S Gopalakrishnan and Srinivas Tuluri, two representatives of the Price WaterHouse, which audited the accounts of Satyam, too, have been arrested by CID in connection with the case.

The members of the standing committee are also likely to inquire about the role of auditors in the Satyam fraud case and the action taken by the Institute of Chartered Accountants against the auditing company.

The 30-member parliamentary committee include Gurudas Das Gupta, Bhartruhari Mahtab, Rupchand Pal, R Prabhu, M A Kharabela Swain, S S Ahluwalia and M Venkaiah Naidu.