Raju brothers arrested finally

Hyderabad, Jan. 9: The police arrested Mr B. Ramalinga Raju and his brother, Mr B. Rama Raju, late on Friday night for their multi-year Rs 8,000 crore scam. All the directors and chartered accountants of Satyam Computers and Pri-cewaterhouseCooper have been named as accused. The Satyam chief financial officer, Mr Srinivas Vadlamani, is likely to be arrested on Saturday, said the CID IGP, Mr V.S.K. Kaumudi. The Rajus drove to the office of the director-general of police to surrender, but the police arrested them to show “tough action”. The duo is likely to spend the night at the CID malkhana in the DGP’s office complex or at AC Guards and will be produced in front of a magistrate on Saturday. The police moved after getting a complaint from one Ms Leena Mangat, a former bank employee in the city, sources told this newspaper. In her complaint which conveniently came at just the right time, Ms Mangat told the CID police that she held 200 Satyam shares and Mr Raju’s actions had cost her heavily. The DGP, Mr S.S.P. Yadav, told this newspaper that cases had been filed under several sections of the IPC including: * Section 120B, criminal conspiracy. Maximum punishment if convicted could be imprisonment for life or rigorous imprisonment for two years and more. * Section 420, cheating and dishonestly inducing delivery of property. If convicted, the Rajus face jail up to seven years and a fine. * Section 409, criminal breach of trust by public servant, or by banker, merchant or agent. If convicted the sentence is imprisonment for life or up to 10 years, besides fine. * Section 471, fraudulently or dishonestly using as genuine a forged document. * Section 468, forgery for purpose of cheating. Punishment is imprisonment upto seven years, besides fine. An arrest under these sections does not preclude other investigations being conducted into the Rajus’ affairs simultaneously by other agencies. Asked whether Mr Raju will be permitted to appear before the Sebi team on Saturday, he said, “We will see how it has to be done.” Mr Kaumudi said that the Rajus stood to get 10 years in jail if convicted. Since the offences involved are of serious nature, the Raju brothers may not be able to secure bail for at least 14 days. They will be able to move the bail petition only after the Sankranti holidays. Though the CID conveniently got Ms Mangat’s complaint against Mr Raju just in time, it delayed taking any action. Things began moving after the Chief Minister, Dr Y.S. Rajasekhar Reddy, returned from Chennai in the evening and convened a meeting with senior officials. Sources said that Dr Reddy, under immense pressure to clean up the Satyam mess and save India Inc.’s face by showing tough action, gave an earful to senior police officials for not arresting the Rajus. His hand was apparently forced by the Centre which earlier disbanded Satyam’s board and began tightening the screws around Mr Raju. Besides, sources said Dr Reddy felt hurt when the Opposition began linking his son Jaganmohan Reddy to the Rajus. The meeting worked out the modalities for the arrest, following which police teams spread out to find the Rajus and located them at their farmhouse at Kompally. The police drove up there and found to their surprise that the Rajus, armed with legal assistance, were willing to surrender. The police officials discussed their next action with top officials following which the Raju brothers came to the DGP’s office with a battery of legal experts including Mr Ramalinga Raju’s personal lawyer, Mr S. Bharat Kumar and their aides. The police barred mediapersons from entering the DGP’s office. The Rajus drove in a convoy of eight cars, four of them Mercedes Benz. On hearing of the arrest, some investors reached the DGP’s office. One of them, Mr K. Shivashankar, said he had lost Rs 1 lakh in the market. Satyam tremors * Satyam may abandon its proposed IT park project in Gandhinagar. * Government owned MMTC has decided to drop its joint venture SEZ plan with Maytas firms in Tamil Nadu. * A new class action lawsuit was filed in the US courts against Satyam Computer. * Investors have lost Rs 13,600 crore in Satyam shares in less than a month. * Satyam shares hit a low of Rs 6.30 before recovering to Rs 20. * Maytas Infrastructure’s share hits circuit breaker. * BSE, NSE remove Satyam scrip from F&O segment. Countdown to arrest 1 pm: CID goes to Sat-yam offices at Madha-pur, finds Ramalinga Raju is not there. 2.30 pm: Sebi issues summons for Raju to appear at 4 pm. 3.30 pm: Raju gets a day’s time, stating he is unwell. 4 pm: Chief Minister arrives from Chennai. 5 pm: CM holds meeting with senior officials on Satyam. 6 pm: Police get go ahead to arrest the Raju brothers. 7 pm: Senior police officers including V.S.K. Kaumudi of the CID interrogate Raju. 8 pm: Centre sacks Satyam board 9.30 pm: Rajus leave for DGP’s office 9.50 pm: Raju brothers reach CID complex at DGP’s office. 10.30 pm: Ramalinga Raju and Rama Raju arrested.

Mulford snubs Singh

Mumbai/New Delhi, Jan. 9: Days after the Prime Minister, Dr Manmohan Singh, said Pakistan’s official agencies could be involved in 26/11 Mumbai terror atta-cks, the US on Friday said “accusations” should not be made without evidence. “I don’t think we want to take a view that we make accusations against certain parties without the usual evidences, proofs,” the US ambassador to India, Mr David C. Mulford, said when asked whether the US agreed with Dr Singh’s view that Pakistan’s official agencies could have had a role in the Mumbai attacks. Mr Mulford said the United States government was determined to work “non-stop” and “as long as it takes” to ensure that the perpetrators of the Mum-bai terror attacks are brought to justice. “When Americans are killed anywhere, we pursue those people and that is what we are up to in Pakistan,” he said at an interaction here. Mr Mulford, when asked about Pakistan's involvement, said, Dr Mulford referred to the concern expressed by the US secretary of state, Ms Condoleezza Rice, because it was an attack “that appeared” to come from Pakistani territory. “It was an attack that appeared to come from Pakistani territory. It appeared to have been done, monitored and managed on Pakistani territory. It appeared to have been conducted by Pakistani people who helped them train and who appeared to have come from Pakistan. For us, it is enough to indicate that there is a problem,” Mr Mulford said.

Board dismissed, Centre takes over

New Delhi, Jan. 9: The Centre got cracking on Friday and sacked the Satyam Computers board, headed by its interim CEO Ram Mynampati on Wednesday. “The current board ceases to exist and there would not be any meeting tomorrow,” the Union corporate affairs minister, Mr Prem Chand Gupta said, announcing the decision. The Centre will appoint 10 directors to run the company. “The new board will meet in the next seven days,” Mr Gupta said. The outgoing board was left with just three members, Mr Mynampati, the independent directors, Mr T.R. Prasad and Mr V.S. Raju. The Company Law Board had acted on a petition by the government to restrain the current directors, he said. A senior official in the corporate affairs ministry said the new board will have the power to appoint a new management including the CEO. Reacting to the development, Lazard Asset Manag-ement claimed it was the biggest shareholder in Satyam and that it should be consulted before the government makes any moves. The industry body Nass-com welcomed the Centre’s decision. Stating that they had not heard from the government “officially,” a Satyam spokesperson insisted, “the interim management is in place as of now.” According to reports, the HDFC chairman, Mr Deepak Parekh, and the IIM-A expert, Prof Jayant Varma, are being tipped to join the new board. Mr Parekh said he had not been contacted but said, “I think this would be all powerful and will take necessary measures to restore confidence among clients and investors of Satyam.” The nominee members, official sources said, would be from various fields such as law, finance, IT and insurance. Besides, representatives from the Reserve Bank of India, Sebi and LIC are also expected to join the new board of Satyam. Mr Gupta said the government was determined to take all possible action under the law to bring to book at the earliest all those persons who are responsible for betraying the faith of lakhs of shareholders, thousand of employees and its customers. Mr Gupta said that action against auditors of the company had already been initiated by the ICAI. “The greed and misdeeds of a few persons who were at the helm of affairs of the company could have caused the present unfortunate situation. We are determined to reach the truth but are equally concerned with the fate of employees and other stakeholders,” said Mr Gupta. He said that officers of his ministry along with officers of the Sebi at Hyderabad have already taken various actions. Mr Gupta said that a team of officers from corporate affairs ministry has already started inspection of eight Satyam group companies.

Sebi set to grill Raju today

Hyderabad, Jan. 9: Mr Ramalinga Raju will depose before a Sebi panel probing his Rs 8,000 crore scam at Satyam Computers on Saturday. His arrest late on Friday night may not affect the schedule, according to legal experts. It is unclear whether Mr Raju will be driven down to the Satyam office at Madhapur or Sebi officials will visit him in jail.

Sebi to audit top cos

Mumbai, Jan. 9: Alarmed by the Ramalinga Raju scam at Satyam Computers, the market regulator Securities and Exchange Board of India (Sebi) on Friday decided to review the earnings statement of all the companies that figure in the stock market indices Nifty-50 and Sensex-30. “Such a review would be in relation to the last quarterly results and last audited annual financial results,” the regulator said. Sebi will prepare a panel of auditors to conduct the exercise, which is likely to be completed by February end. The decision was taken after a meeting of the Sebi’s committee on disclosure and accounting standards. The companies that figure in the stock trackers include India’s most valued Reliance Industries, Tata group companies, public sector companies like ONGC and IOC. Institute of Chartered Accountants of India, the apex body of chartered accountants, said that auditors could take up to 15 days to peer review the companies. The ICAI president, Mr Ved Jain said there were about 75,000 chartered acc-ountants.

Lanka opens Jaffna road

Colombo, Jan. 9: Sri Lankan soldiers on Friday captured the strategic Elephant Pass linking the Jaffna peninsula with the rest of the country, dealing another decisive blow to the LTTE after the fall of Kilinochchi into government hands over a week ago. The advancing troops also secured the 325-km A-9 highway linking Jaffna with Kandy after 23 years, setting off celebrations across the country. “By this evening our tro-ops have completely freed the Elephant Pass area from the LTTE. Similarly, bringing Point Pedro and Devundara together, the A-9 route has been completely freed from the clutches of the LTTE,” Sri Lankan President, Mr Mahinda Rajapakse, said in a televised address to the nation. Point Pedro is the northernmost tip of Sri Lanka. Dondra Head, the southernmost tip of the island nation, is located at a longitudinal distance of 480 km. The Sri Lankan defence ministry, in turn, said the endgame of the LTTE’s protracted separatist cause was reaching its final stages. “It is a significant victory for the whole country. The LTTE is now cornered to Mullaitivu town and jungle. The troops that captured Kilinochchi and Paranthan are moving eastwards,” military spokesm-an Brig. Udaya Nanaya-kkara told this newspaper. Communication intercepts suggested that the LTTE had moved all its resources to Mullaitivu where its chief Prabhakaran was hiding. The LTTE chief has been reportedly radioing threatening and distress calls to his confidants.

Petrol bunks will reopen today

Hyderabad/New Delhi, Jan. 9: Fuel outlets will function normally from Saturday after recalcitrant officers of two oil companies buckled under pressure and withdrew their three-day-old strike. The Centre had to crack down on the oil officials, ordering arrests and calling in the Army, before they called off their strike which had stranded vehicles on the road, delayed flights and affected fuel generation. The moves cracked the Oil Sector Officers Associ-ation, with Bharat Petrole-um, the second largest retailer, walking out of the agitation. With the services of 67 executives of ONGC and Indian Oil already terminated and more lists being drawn, the other constituents of OSOA in bits and pieces withdrew from the agitation. “Everything will be normal by Saturday,” said the oil minister, Mr Murli Deora. Fuel bunks in Hyderabad started getting supplies by Friday evening itself, with oil officials working double-fast to make up for three days of hardship. “Near normalcy has been restored as all the officials have resumed duties,” said a senior executive of public sector oil company. The AP Petroleum Dealers Associa-tion said motorists need not worry about fuel supplies from Saturday. “Panic buying was the main reason for the shortage of fuel. Othe-rwise supplies would have been sufficient for at least for one week,” the association president, Mr M. Prabhakara Reddy, said. However, the ongoing strike of truck-owners co-uld impact supplies. The AP Lorry Owners Associat-ion has said it would not call off the strike until the Central and state governm-ents accept their demands. Earlier, over 10 lakh vehicles in the city went off ro-ads due to non-availability of fuel, leaving thin traffic on the roads. Some petrol bunks which were selling limited stock saw clashes between the motorists and staff.