The interrogation of six prime suspects in the Satyam scam currently lodged in Hyderabads Chanchalguda Jail including that of its founder Ramalinga Raju has given investigators crucial clues that,taken together,show how India Incs biggest fraud was scripted over seven years. And involved an elaborate cover-up operation,according to interrogation reports accessed by The Indian Express,in which top officials have claimed they were instructed to stash away property papers in locations across the city,including garages and even a sprawling mango orchard.
These interrogation ince been submitted by the Andhra Pradesh CID to the magistrate hearing the case in Hyderabad. Key are the testimonies of two of Rajus top associates Satyams Chief Financial Officer Vadlamani Srinivasan and Datla Gopalakrishna Raju,General Manager of SRSR Advisory Services,a company promoted by Ramalinga Raju to manage his stakes in Satyam. Both Srinivasan and Datla Raju are lodged in cells next to Ramalinga Raju and their statements,investigators say,will be used as evidence.
During his interrogation,Ramalinga Raju has fleshed out his dramatic January 7 confession and admitted to how the fraud was scripted and why he came clean. For instance,he has said that since he built the company from scratch,he could not bear the thought of it coming down and his resignation from Satyam was the only way to save the situation.
His testimony begins with the admission,We wanted to show more income in the accounts to avoid others from involving in company affairs and any possible hostile acquisition. This continued for seven years and the margin amount got increased much more year after year…I have raised an amount of Rs 1,230 crore by pledging the shares held by our family and inducted the amount into Satyam Computers. But I could not fill up the deficit.
He has also confessed to the opposition he faced to the takeover of his sons firm,Myatas Properties,which eventually resulted in the scam becoming public.
I have tried to takeover Maytas Properties to cover up the deficit since the same has immovable properties, he is quoted as having said. Some of the Board of Directors did not agree and shareholders also expressed themselves against the said proposal because of which the proposal had to be dropped. Because of the present global financial situation,the disparities shown in the balance sheet,it became difficult to cover up and things have gone out of control.
Interestingly,the testimony of Ramalinga Rajus younger brother,Rama Raju,is identical in nature. But that is not the case with those of his key associates,to begin with the companys CFO,Vadlamani Srinivas who has given a detailed narration of how,year after year,Satyam accounts were managed on an understanding between the auditors and the management and that he was given a copy of the balance sheets,as a fait accompli only hours before commencement of the Board meetings.
Vadlamanis interrogation is crucial in the manner he has exposed how Ramalinga Raju and Rama Raju thwarted his attempts at getting to the bottom of the existence of fictitious Fixed Deposits. He has confessed,I was suspecting something was going wrong when the payments were delayed,then I asked the Chairman (Ramalinga Raju) and the Managing Director (Rama Raju) for taking the payment amount from FDs. But they told me not to take it from the FDs and manage with operational cash. This was continuing for the last 5-6 years.
Satyams incarcerated CFO has named a junior accountant who handled matters such as the issue of FDs and stated that in his opinion,it was very likely that the FDs were unreal and fictitious.
The most damaging account is that of Datla Gopalakrishna Raju,the Administration Manager of SRSR Advisory Services and a Director of Maytas Infrastructure. He has admitted that since 2003,he was picked by Ramalinga Raju as the custodian of all documents pertaining to property acquisition (after registration) and that all papers were retained by him at Sonajiguda in Hyderabad.
He has also named two other General Managers of the same company both of whom are absconding who were entrusted with the job of land identification and registration. The most incriminating part of his statement, Since the past 15 days,Suryanarayanan Raju (Ramalinga Rajus other younger brother,who too,is absconding) was instructing me in a hurried manner to shift all the original documents to various places to conceal them from the police. On September 10,2008,he came personally to my office and instructed me to hide the documents. Later,he used to instruct me on the phone. On his instructions,I along with my colleague K V N Krishna Raju had taken all the original documents,hired a Toyota Innova and camoflauged them in various places in the city. The places were other than the regular office premises in Jubilee Hills.
Datla Gopalakrishna Rajus interrogation report contains a lengthy list of addresses (mostly apartments,empty plots and garages) dotting Hyderabad where documents were allegedly secretly transferred and all the keys were retained by him.
The secret locations,incidentally,included a vast mango orchard owned by Ramalinga Raju. Datla Raju has also told the police how 11 boxes of documents related to Maytas Properties were handed over to him,again,on the instructions of Suryanarayanan Raju,late in the night near Hitec City in Hyderabad with instructions that these be ferreted away.
It was on the basis of the addresses of secret locations provided by Datla Gopalkrishna Raju that CID investigators eventually recovered all property papers,a key to the unfolding scam. Among the testimonies,the ones recorded of the two recently arrested auditors of Pricewaterhouse Coopers auditors,S Gopalakrishnan and Taluri Srinivas,appear to be the ones most guarded.
Gopalakrishan,for instance,has told the CID sleuths that while there may be a posibility that the FDs were forged,they did not detect it since they verified it only periodically. Curiously,both the auditors have identically stated that the confession given by Ramalinga Raju that he inflated the cash receipts and bank balances of Satyam Computers appears to be false.