Satyam’s American pie vanishes without trace

Investigating Officials Find 2/3rds Of $150 M Raised From US Investors Did Not Make It To Company's Accounts

Dheeraj Tiwari & Souvik Sanyal ET NOW

TWO-THIRDS of the $150 million that Satyam Computer Services raised from US investors through an issue of American depository shares (ADS) in 2001 is not traceable, the Serious Fraud Investigation Office (SFIO), which probed India's biggest corporate scam, has found.
    The 14,000-page SFIO investigation report to the government has revealed that only $50 million of the ADS collections made it to the company's Indian bank accounts, said an official who has seen the report.
    "The investigation has found that Satyam promoters have showed that the money was parked with Citibank, but no such accounts were found with the said bank," said the official who asked not to be named.
    The matter is now being probed by the Enforcement Directorate, he said.
    "As of now, there are no clear indications if the money was routed back to India through any other channel, but there is a probability that it may have found its way into Maytas Infra or Maytas Properties," said the official.
    Both the Maytas companies are owned by relatives of Satyam founder and former chairman B Ramalinga Raju, who shocked the world in January by revealing that India's fourthlargest software exporter had been overstating its profits for years. The money may have also been diverted to other front companies owned by the Raju family, the official added.
    With the SFIO investigation bringing out details of a flood of questionable details of the Satyam scandal that leave its total liabilities unclear, the challenge for Tech Mahindra is getting bigger.
The Mahindra group company had outbid L&T Infotech and US billionaire and turnaround specialist Wilbur Ross to strike a deal to buy a 51% stake in Satyam for Rs 2,910 crore. Tech Mahindra, which announced a 19% jump in its consolidated revenues at Rs 4,465 crore for 2008-09 on Wednesday, has repeatedly said that the company remains upbeat on Satyam.
    Last week, Satyam had announced its intention to delist its shares from New York Stock Exchange (NYSE) and the Euronext in Amsterdam due to financial and legal pressures and has started working in that regard.
    Last year, Satyam got listed on Euronext in Amsterdam and became the first Indian company to get listed on three major exchanges — NYSE, Nasdaq and Euronext.
    Non-US companies must take the ADS route to list their stock on American exchanges such as NYSE and Nasdaq. ADS are the US dollar-denominated equity of foreign companies that can be traded on American stock exchanges.

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