Serious fraud team joins Satyam probe

18 Jan 2009



HYDERABAD: It is not only Crime Investigation Department (CID) that is planning to book cases against independent directors of Satyam. The Serious
Fraud Investigating Office (SFIO) has also started probing into the role of independent directors, managers and officers of the company in the Satyam scam.

The Ministry of Corporate Affairs has given instructions to the SFIO to probe the involvement and role of the independent directors, managers and officers of the company in the alleged misrepresentation, falsification and manipulation of information in the financial statements.

"The order said it is has be probed whether the conduct of the affairs of the company by such directors and officers of the company was in an improper or fraudulent manner," an official said.

The ministry of corporate affairs ordered the probe by Serious Fraud Investigating Office on January 13 into the scam.

The six-member team headed by K V S Singh, additional director of SFIO and five assistant directors has already begun their probe.

The Ministry of Corporate Affairs said in its order that there is a sufficient ground for investigation in all aspects of the scam. It said there was a possibility of existence of false statements in the statutory and other disclosures made by the company.

"There are doubts on the correctness and truthfulness of the audited balance sheet and other financial statements of the company," the order said.

In the wake of order, the SFIO, is looking into the angle of the functioning of the board and its various committees and omissions and negligence, if any, by the board of directors of the company in conduct of its duties and functions.

"Some decisions of board of directors of the company were non transparent," an official said.

The preliminary investigations by Registrar of Companies and confession by Ramalinga Raju revealed the balance sheet of Satyam for the year 2008 contained `cash and bank balances' of Rs 5040 crore as against the Rs 5361 crore reflected in the books, an accrued interest of Rs 376 crore which was described by Raju as `non existent' and an `over stated debtors position' of Rs 490 crore as against Rs 2561 crore reflected in the books.

The SFIO is suspecting whether there was siphoning of funds of the company which detrimental to the interest of the company and lapses of internal financial controls.

"We have been asked to investigate the role of internal and statutory auditors of the company in the inflated figures of statement,'' an officer of SFIO said.