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Minister says funds ‘diverted’,probe looks at Maytas firms

The Andhra Pradesh CID is looking closely at Maytas Infra and Maytas Properties — firms run by B Ramalinga Raju’s sons B Teja Raju and B Rama Raju Jr ....

Written by Sreenivas Janyala | Hyderabad | Published: January 19, 2009 11:55:21 pm

The Andhra Pradesh CID is looking closely at Maytas Infra and Maytas Properties — firms run by B Ramalinga Raju’s sons B Teja Raju and B Rama Raju Jr — to figure out where Satyam’s money disappeared. This,rather than what fraud the IT giant’s disgraced founder committed and how,is the focus of investigations currently,senior CID officers associated with the probe told The Indian Express.

On Sunday,Corporate Affairs Minister Prem Chand Gupta told PTI in New Delhi that there appeared to have been a “diversion” of funds from Satyam. “Prima facie aisa lagta hai ki diversion of funds ka kuchh issue hai. Jo facts and figures balance sheet mein show kiye gaye hain,they are not based on the correct information… galat kaam toh bahaut hua hai.”

Gupta,however,said “as of now” there was no plan for a CBI probe into the scam. “The government has ordered inspection of eight companies (Satyam subsidiaries)… investigation by SFIO has also been ordered,” he said.

An investigator from the Andhra Pradesh CID’s Economic Offences Wing told The Indian Express: “It (the fraud) is so complex and so big. The obvious question is not how the fraud was committed but where has all the money gone? Naturally,we are looking at Maytas Infra and Maytas Properties,as both are owned by the Raju family,and in which they have a bigger stake than they did in Satyam. If you consider their phenomenal growth during the last few years,a lot of things become clear. All the money from Satyam could have gone into these companies… All that remains now is to join the dots.”

According to investigators,Ramalinga Raju’s anxiety to see his sons succeed in their businesses might have overriden his love for Satyam,the company he founded and nurtured for over two decades. While the probe into the fraud is only just beginning,it is possible,the investigators said,that instead of trying to save Satyam by pledging stocks and fudging balance sheets to show more profits and attract more business,Raju was,in fact,ploughing the crores from Satyam into buying thousands of acres of prime real estate that would strengthen Maytas Infra and Maytas Properties.

During the aborted attempt to acquire the two companies in December,Satyam had estimated that Maytas Properties with assets of 6,800 acres was worth Rs 6,500 crore. The question asked then was how Maytas Properties,which was founded only in 2005,had built up enough resources to buy such massive land. Over the weekend,investigators were probing whether Raju disposed of his shares in Satyam and utilized Satyam’s funds to buy land for his sons’ companies.

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