Raju's confession - whistle blower's act
By siliconindia   |   Friday, 17 April 2009, 15:57 IST   |    22 Comments
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Raju's confession - whistle blower's act
New Delhi: The confession of B Ramalinga Raju, the disgraced founder of Satyam, which unfolded as the biggest corporate scandal, was not prompted by his conscience rather a whistle blower's action. An email of a person, who claimed to be a former Satyam executive, to one of the firm's board members ignited a chain of events that led to the confession. "The first email of Abraham was written to the company's independent director Krishna G Palepu on December 18, 2008 that Satyam did not have any liquid assets. He also maintained that the fact could be independently verified from its banks," an official, who is privy to the confidential SFIO report told The Economic Times. The findings are based on a 14,000-page report submitted by the Serious Fraud Investigation Office (SFIO) to the government earlier this week. The SFIO concluded the Satyam scandal to be 7,333 crore as of end-September last year. Raju's revelations was the result of a actions of a person who leaped into the firm's scam using a pseudonym as Jose Abraham and asserted his involvement in Satyam's contracts with the World Bank. The email was sent a day after Mr Raju was forced to abort Satyam's plans to buy two companies linked to his family, Maytas Infra and Maytas Properties, after it ran into a storm of investor protest. The revelations immediately spread among the Satyam's former board membersM Rammohan Rao, VS Raju , TR Prasad and Satyam's statutory auditor S Gopalakrishnan of Price Waterhouse. A copy of the email was also sent to B Ramalinga Raju, who had started receving calls from members of the board's audit committee, but did not respond to any of them. The SFIO report also reveals that these speculations led Raju to hold meetings with company's then CFO and vice-president for finance G Ramakrishna, between last December 25 and January 7 to work out a plan to hide the fraud. Failing to find a way out and concerned that he might be caught by capital market regulator SEBI and the U.S. Securities Exchange Commission (SEC), Raju issued his sensational confession. According to the investigation report, the falsification of the company's accounts began in the financial year 2001-02 after there was an informal meeting between Ramalinga Raju, his brother Rama Raju and Srinivas, apart from the company's vice-president finance G Ramakrishna. This report will form the foundation for initiation of a criminal action against Ramalinga Raju, Rama Raju, Vadlamani Srinivas, Price Waterhouse officials S Gopalakrishnan and Srinivas Talluri, and two other company executives , senior manager finance D Venkatapathy Raju and finance manager C Srisailan.

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