The disgraced promoter and managing director of Indian blue chip Satyam Computer Services surrendered to the law enforcement authorities, late on Friday evening in Hyderabad. The Director General of Police in Hyderabad has said that Rama Linga Raju accepted his role in the Rs 7000 Cr ($1.25 bn) fraud that jolted the corporate India on 7th Jan 2009. So, the cops arrested Rama Linga Raju and his brother Rama Raju under sections 120-B, 409, 420, 468, 471 of Indian Penal Code. The CFO of the company Vadlamani Srinivas may be arrested on Saturday morning.
Rama Linga Raju, the promoter of the 4th largest Indian IT Service Company, Satyam Computer Services, has been trying to cover up the financial irregularities at the organization for the past few months. Earlier in Dec 2008, he attempted to merge his other enterprises Mayatas group into Satyam Computer Services, so as to cover up the irregularities. However the investors and the market regulator has prevented his plans. Finally, Raju announced on 7th Jan that a sum of 7000 Cr in the account books of Satyam indeed is non existent.
Considering the magnitude of the fraud, Ramalinga Raju may not get a bail in the case.
The cops are currently enquiring whether the 7000Cr is non existent or has been siphoned off by the Raju brothers. The local political parties and media is abuzz with conspiracy theories that Raju brothers have used the money to bribe the ruling congress government in procuring various infrastructure & real estate contracts for their Mayatas Group. They claim that Raju’s Mayatas has funded the Sakshi news paper, which is run by the son of Andhra Pradesh Chief Minister YS Rajashekhar Reddy.
We will have to wait for Raju’ confession which is currently underway at the DGP office in Hyderabad.