Rajus skimmed off Rs 1,070cr

Hyderabad/New Delhi Jan. 12: Satyam Compu-ters’ disgraced ex-boss B. Ramalinga Raju made a cool Rs 1,079.39 crore in five years by trading in shares of the company. This massive gain raises the question: Did Mr Raju use insider knowledge while he and his family sold over 43 million shares between June 30, 2001 and September 30, 2008. Insider trading, or trading in shares based on confidential data, is one of sleaziest of crimes on the market. This means Mr Raju was trading in shares using knowledge only he had. In his confession letter of January 7, Mr Raju says, “neither myself nor the managing director (including our spouses) sold any shares during the past eight years — excepting for a small proportion declared and sold for philanthropic purposes.” As the records available with BSE and researched by Financial Chronicle shows, that claim was a big lie. “Neither me nor the managing director took even one rupee/ dollar from the company and have not benefited in financial terms in terms of financial results.” All these bleeding heart statements lie in tatters now. Quite obviously, he was fudging the accounts to boost the share price and then sell off his stake to make many many quick bucks. Sleuths have found out that Mr Raju had been selling his stake in the market every quarter from June 2001 to June 2006. That would mean 22 quarters since June 2001. Though he confessed to fudging books and balance sheets, the stock market figures are glaringly revealing. On June 30, 2001, the Raju family owned 71,984,640 shares, or 22.89 per cent in Satyam. Betwe-en June 30, 2001, and Sep-tember 30, 2001, the shares went down to 71,636,944 or 22.78 per cent. The money trail has led investigators to a Mauritius-based firm, Lakeview Investments. “We think funds were siphoned from Satyam into a bank account of the Mauritius firm,” said an investigator. Two land deals of the Raju family, allegedly done by pledging promoter shares in Satyam through SRSR Holdings, also led to the numbered account. The money trail is being tracked by officers of the serious frauds investigation office (SFIO), who are currently in the registrar of companies team in Hyderabad. “We are not sure as to who got the funds abr- oad,” said an SFIO official. This puts the company’s auditors in even worst light than before. “None of this could go undetected if the internal auditing team, independent auditors or the independent directors were doing their job,” said Mr Amir Z. Singh, Pasrich managing partner of International Law Affiliates. “In fact, Sebi has issued clear guidelines on the subject.” In this case, the complicity of the auditors is glaringly evident. “You have to become suspicious when there is a sharp rise in the auditor’s fee,” said Mr Shailendra Kumar of Taxindiaonline. It was reported that PricewaterhouseCoopers were paid five times the usual amount for an auditing firm.

Satyam to get cash aid

New Delhi/Hyderabad Jan. 12: The Centre on Monday expressed willingness to consider “giving financial assistance” to bail out crisis-ridden Satyam Computer Services Ltd, even as the government-appointed board, which met in Hyderabad, indicated that its focus would be on getting the company back on track. The Prime Minister, Dr Manmohan Singh, meanwhile, held a review meeting with officials of Sebi and the finance ministry to assess the fallout of the Satyam financial fraud. Dr Singh deliberated with the Sebi chairman, Mr C.B Bhave, on “further steps” to be taken to bring the troubled company back on track. “The Prime Minister, Dr Manmohan Singh, is closely following the developments,” sources in the PMO said, adding that he directed the cabinet secretary, Mr K.M. Chandrasekhar, to “coordinate the approach of the government” on the issue. Clarifying the government’s position, the industry and commerce minister, Mr Kamal Nath, said since it was a question of saving jobs and the global reputation of Brand India, “The government is ready to consider all proposals from the newly-constituted board.”

LTTE has 2 lakh in captivity

Colombo Jan. 12: New Delhi’s silence was as welcome for Colombo as it was worrying for ethnic Tamils in Sri Lanka. As Sri Lankan fighter jets and attack helicopters pounded LTTE positions on Monday, the Tamils feared for the safety of civilians in the Wanni area and those others trapped behind LTTE lines in the jungles of Mullaittivu. While the pro-LTTE Tamil National Alliance appealed to New Delhi and Chennai in the same breath to intervene and save the lives of civilians caught in the conflict zone, a moderate section represented by the Tamil United Liberation Front directed its anger at the Tamil Nadu Chief Minister, Dr M. Karunani-dhi for not being vocal enough on the plight of civilians being used as a human shield by the LTTE. The LTTE is holding over 200,000 civilians captive in the jungles of Mullaittivu, its last bastion, in order to recoup its residual fighting capability and thwart Sri Lankan troops from making further advances. Mr Gajen Ponnambalam, a Member of Parliament and general secretary of the All Ceylon Tamil Congress (ACTC) — a TNA constituent — said what was happening in Sri Lanka today was “genocide”.

World Bank bars Wipro, Megasoft

Bengaluru/Hyderabad Jan. 12: The World Bank announced that it had barred two major tech firms, Wipro, the country’s third largest software services exporter, and the consultancy arm of the Hyderabad-based IT firm Megasoft for four years. Coming less than a month after Satyam Computers was barred for eight years, the World Bank action will besmirch the image of India Inc. Tech firms led the fall on the BSE, with Infosys, TCS and Wipro itself losing about 9 per cent each. Wipro was barred from competing for direct contracts for having provided “improper benefits to Bank staff”. The disqualification, till 2011, was in place since June 2007. It emerged on Monday after the World Bank decided to make public the names of firms that have been debarred from receiving contracts under its corporate procurement programme. Wipro said it had done no wrong. It said that in the year 2000, it used an SEC-approved Directed Share Programme to offer Amer-ican Depository Shares (ADS) to employees as well as clients at the IPO price. This offer went to World Bank employees, their friends and families, who purchased 1,750 ADS for $72,000. The firm said this does not “benefit” World Bank employees since the offer was market price-based and no further concessions were made. The Bank said the transaction violated its standard procedures. “Improper benefits are their view. We were fully compliant with regulation,” the joint CEO of Wipro’s IT business, Mr Girish S. Paranjpe, said. “How many shares each individual could get was restricted. From our side, it was a goodwill gesture,” he said. The share allotment was decided by investment bankers. “How can we be held responsible for that.” he asked. Megasoft said the action would have no financial impact. Megasoft was barred for employing a World Bank ex-employee during the course of the contract. Megasoft had employed a former World Bank associate in its Chinese joint venture while conducting business with the bank. Mr G.V. Kumar, the managing director, said the company did not have any business relationship since 2004 with the World Bank. He admitted that the ban would hit the company’s image but Megasoft itself had been moving away from on-site work to telecom products-related work and offshore services. Megasoft has a client-base spread across three continents — North America, Latin America and Asia — and operates out of offices spanning Europe, Asia and America. The company employs around 900 employees. The company’s shares fell 13 per cent to the lowest in at least five years on the Bombay Stock Exchange after the bank announced its decision.

Raju bought land for sons

HYDERABAD Jan. 12: The Crime Investigation Department (CID) suspects that Satyam ex-boss Ramalinga Raju might have diverted the company funds for purchasing assets in companies floated by his sons. CID sleuths termed the Satyam scam a “monumental fraud” while seeking custody of the Raju brothers before the sixth additional chief metropolitan magistrate on Monday. Police have impounded the passports of the Raju brothers as well as the ex-chief financial officer, Mr V. Srinivas, and are seeking details from banks to freeze their accounts. The CID also felt that such a gigantic fraud could not have been perpetrated without the connivance of other directors. According to the investigating officer, the deputy superintendent of police, Mr Balaji Rao, attempts were being made to trace the investments of Raju br-others in other companies. In the written statement before the magistrate, Mr Balaji Rao said that the two “high profile brothers” had several offices in many foreign countries. “The investments and properties acquired by the accused in many countries are to be elicited,” he said. “They have accounts in various banks in India and abroad, all details have to be collected and scrutinised.” The CID said the brothers had admitted to Rs 8,000-crore fraud and Mr Raju had also confessed that his family owned 100 acres of farmland in West Goda-vari, Krishna and Ranga Reddy districts apart from a grape garden of 20 acres in Ranga Reddy district. In its remand diary, the CID alleged that the Raju brothers were responsible for fabrication of records and manipulation of accounts books of the company. “It is not possible for a single individual to commit such a massive fraud without the connivance of other directors,” the agency said. “The role of directors and chartered accountants has to be probed.” It turned out, however, that the CID has lifted news reports of banks declining to comment on freezing of Satyam accounts verbatim in the remand dairy. CID officials have named as witnesses, Mr Karthik Sankaran, 36, a businessman and resident of Golconda Crossroads, Mr Abbas Hussain, 40, of Begumpet and Mr V. Narendar Reddy, a senior assistant in sub registrar office, as witnesses. Meanwhile, Mr Anil Uttarwar, the head of Maytas Infra’s corporate communications, said that the claim of CID on Mr Raju diverting Satyam funds to companies of his son was false.

Venkatesh voted ’07 best actor

Hyderabad Jan. 12: The state government on Monday announced the Nandi film awards for the year 2007. Venkatesh won the best leading actor for his role in Aadavari Matalaku Ardhale Verule while Charmi bagged the best female actor award for her role in the film Mantra. Mee Sreyobhilashi produced by Ms Sonia Reddy was declared the best feature film of 2007 and blockbuster Happy Days of Mr Shekar Kammula won the award for the second best feature film. Mr Krishna Vamsi won the best director award for Chandamama. The best entertainer award went to Aadavari Matalaku Ardhale verule. Jagapathi Babu bagged the best supporting actor award for Lakshyam, and Janaki was adjudged the best supporting female actor for her acting in Amulyam. Uttej’s role in Chandamama won him the best comedian award and the award for female comedian went to Jhansi for her role in Thulasi. Bhumika Chawla and Ram Charan Tej won special jury Nandi awards. For his scores in Happy Days, Mickey J. Meyer won the best music director award. The jury adjudged Amulyam — The Priceless Gift as the best children’s film. This movie was produced by the Children’s Film Society of India. Master Roshan bagged the best child actor for his role in O Chinnari Korika and Baby Varshini the best child actor award for her role in the movie Amulyam. Chandrahaas produced by Mr G.K. Mohan won the best feature film on National integration. There were only two entries for the best educational film award which went to Good Bad Ugly directed by Mr B. Premchand. Mr Srinivasa Raju was adjudged the best art director for Chandamama, while the best lyric writer award went to Mr Venigalla Rambabu for Mee Sreyobhilashi. Mr Srinu Vaitla’s screenplay for Dee won him the award for the best screenplay. Yamadonga won Mr Kotagiri Venkateshwara Rao the best editor award. Aahuthi Prasad won the best character award for Chandamama. Rama Rajamouli was adjudged the best costume designer for his work in Yamadonga. Ram and Lakshman jointly shared the award for the best fight master for Dee. Anaganaga oka Raa bagged the award for the best book on Telugu cinema while Mr Challa Srinivas was adjudged the best critic. The Nandi awards committee had received 47 applications for various categories.