Chances of a speedy resolution to l’affaire Satyam receded on Wednesday with the Andhra Pradesh high court granting bail to the company’s founder and former chairman, B. Ramalinga Raju, freeing, albeit temporarily, the last of the accused in a corporate fraud that came to light in early 2009 with Raju’s confession and whose magnitude has since doubled to a claimed `14,000 crore.
Raju’s release is a setback for India’s federal investigating agency, the Central Bureau of Investigation (CBI), which is yet to produce him in court in person. Arrested on 9 January 2009, Raju has been undergoing treatment for Hepatitis C at Nizam’s Institute of Medical Sciences, Hyderabad.
On 16 August, he retracted his confession in the trial court by responding in the negative to questions posed by the court about the fraud. The burden of proof for Raju’s fraud now rests with CBI. And now, he is out on bail—for two sureties of `20 lakh each.
On 7 January 2009, Raju confessed to fudging the books of Satyam Computer Services Ltd to the tune of at least `7,136 crore over several years. The confession came a few weeks after investor ire had scuppered the proposed merger of Satyam with Maytas Properties Ltd, promoted by members of his family. Maytas’ assets would have helped hide the hole in Satyam’s books.
Since Raju’s confession, the ownership of Satyam Computer has changed hands, facilitated by a government-appointed board that helped the firm retain most of its customers and employees. The firm is now owned by the Mahindra Group’s Tech Mahindra Ltd.
CBI, whose petition contesting Raju’s bail application was dismissed by the court, will now appeal in the Supreme Court, said V.V. Laxmi Narayana, deputy inspector general of the agency. “We have already moved the Supreme Court contesting the bails granted to other accused in the case recently and we will be filing a petition in the Supreme Court shortly opposing the bail granted to Ramalinga Raju today,” said the CBI official.
On Wednesday, CBI requested the high court to hold its judgement on the bail petition for at least 10 days since its petitions challenging bail granted to the other accused is expected to come up for hearing in the Supreme Court by then.
Raju’s release is another blow to CBI, said a person involved in the investigation into Raju’s doings at Satyam. Ye. Seshasai Babu, a chartered accountant who has also been helping the government’s Serious Fraud Investigation Office in its case against Satyam, said: “It is unlikely that CBI, which could not succeed in making Ramalinga Raju attend the court at least once during the past 19 months, will make him cooperate in the investigation or trial when he is out on bail.”
In its argument before the court on 16 August, CBI said Raju could tamper with evidence if released, and that his position as the CEO of the firm at the time of the fraud made him more accountable than the chief financial officer (CFO) and managing director, both of whom were granted bail earlier.
CBI’s additional solicitor general, H.P. Raval, emphasized the size of the fraud, terming it “economic terrorism” and said there were no new reasons for the bail to be granted.
However, defence counsel M. Natarajan argued that since Raju, CFO Srinivas Vadlamani, and managing director B. Rama Raju had been booked under the same section, they could not be treated differently by the court.
He also claimed that CBI could take as long as two years to frame one of its chargesheets against Raju, and not six months as claimed by the agency. Natarajan described Raju as a very ill man who could suffer internal bleeding or a heart attack at any moment and said he was in no position to tamper with evidence.
Speaking to the media, Raju’s lawyer S. Bharath Kumar said, “Raju would not have surrendered himself to police on 9 January 2009 and cooperated with the investigating agencies so far if he intended to influence the witnesses or tamper with any evidences.”
He added that Raju had no access to the records concerned with the investigation, which have been seized by various investigating agencies, including CBI. Satyam Computer Services is now under the control of a new management, so the question of influencing the witnesses or tampering with evidence does not arise, Kumar said.
Raju’s release is also likely to raise the hackles of legal activists, who claim that moneyed and powerful people always manage to get bail, while the not-so-fortunate ones continue to languish in jail. According to varying estimates by the law ministry and the National Crime Records Bureau, India has between 120,000 and 300,000 undertrials in prison.
Salman Khurshid: Raju’s bail won’t hamper investigations
Corporate Affairs Minister Salman Khurshid said that the bail granted to B Ramalinga Raju, the tainted founder of Satyam Computer Services, will not hamper investigations.
“It (the bail) will not, it never does. The trial courts…keep this in mind. I think this is the law of the land and this does not worry us,” Khurshid said.
The Andhra Pradesh High Court granted bail to Satyam’s prime accused Raju on the condition he stay in Hyderabad and provide two sureties for Rs 20 lakh each.
On whether the bail will tarnish the Indian Government’s image internationally in handling the Satyam case, Khurshid said, “We will handle….Bail is a rule, Jail is an exception.”
With Ramalinga Raju getting bail, all the 10 accused in the Rs 10,000 crore (Rs 100 billion) Satyam accounting fraud case have been granted bail by various courts.
Raju, who was arrested on January 7 last year, is undergoing treatment in a city hospital. Justice Raja Elango granted the bail to the former chairman of Satyam Computer, which has since been taken over by Mahindra group and renamed Mahindra Satyam, even as the CBI said he could influence witnesses, numbering 250, if let out.
Raju had in January last year written to the company’s board admitting to fudging the accounts. Raju will remain in Hyderabad city until further orders, his lawyer Bharat Kumar said.
Kumar added that Raju has been cooperating in the investigations and will continue to do so without any exception. “He will scrupulously follow any conditions laid down by the court.”
