The Hindu Business Line : SFIO looking into Satyam, Maytas ‘nexus’

New Delhi, Jan. 19 Finding an apparent “nexus” between events taking place in Satyam Computer Services and Maytas Properties Ltd and Maytas Infra Ltd, the Government on Monday expanded the scope of investigations being undertaken by the Serious Fraud Investigation Office (SFIO).

While maintaining that it was too premature to say that there was diversion of funds, the Corporate Affairs Minister, Mr Prem Chand Gupta, said “The inspectors investigating the matters relating to Satyam have informed about an apparent nexus between the events that have taken place in Satyam and the two companies — Maytas Properties and Maytas Infra.”

“To uncover the facts relating to the events in Satyam, it is necessary to obtain information, records, books and papers from these two companies. Therefore, in exercise of powers under the Companies Act, the Government has approved and authorised the SFIO inspectors to obtain such books, records, papers as they deem necessary from the two companies,” he said.

The Minister declined to elaborate on what exactly is the “nexus” found by the investigating authority. Sources told Business Line that the SFIO would be looking into an entire gamut of issues — role of auditors, promoters, directors of the two companies, and transfer of funds from one company to another. Thus, inferring that the possibility of diversion of funds cannot be ruled out, “but we have to wait for reports from the SFIO regarding the two companies,” sources said.

A preliminary report on the investigations can be expected within two weeks. However, the SFIO will submit its final report within three months. Asked whether SEBI is also being involved, as Maytas Infra is a listed entity, sources said, “SEBI is doing its independent investigations. But we are working in close co-ordination with the regulator.”

“I would like to reiterate that the Government would leave no stone unturned to obtain full facts of the case, to ascertain the extent and nature of irregularities that may have been committed relating to Satyam, within the company or in association with other companies and find out and punish the guilty,” the Minister said.

As regards what could be the next step of the Ministry if something wrong is found during the investigations of these two companies, sources said, the Government would then approach the Company Law Board to initiate further action.

The case also seems to be taking a political turn. The Andhra Pradesh Chief Minister, Dr Y.S. Rajashekhara Reddy, who was in the Capital, dismissed charges that he was responsible for the rise of Satyam’s tainted founder Mr Ramalinga Raju. He passed on the buck to his predecessor and TDP leader, Mr N. Chandrababu Naidu.

“By the time I became the Chief Minister, he had already risen to a very high level. I am not responsible. In no way did he need my promotion. All the promotion was already done,” he told reporters.

During the day, Dr Reddy met Ms Sonia Gandhi, Mr Pranab Mukherjee and other Congress functionaries. He maintained that the Satyam issue did not figure during his talks with Ms Gandhi.

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