Raju wants 'invested' funds back from Mahindra Satyam

B. Ramalinga Raju, founder of erstwhile Satyam Computer Services Ltd, charged with the multi- thousandcrore- rupees accounting fraud at the IT behemoth, might be down but not completely out.

Raju is making every effort to get out of bankruptcy by making Mahindra Satyam, the new management of the company, to cough up Rs 1,230 crore pumped into the company through a host of shell companies floated by him and his family members before the scam broke out.

According to industry circles, he is likely to enter into a settlement with the M- Sat management - at between Rs 700- 900 crore - to avoid a prolonged legal battle.

Short- term loan B. Ramalinga Raju is going all out to get out of bankruptcy by making new owner M- Sat to cough up Rs 1,230 cr pumped into Satyam through a host of shell cos floated by Raju & co before the scam. Raju's trick In his confession Raju said he had arranged for Rs 1,230 cr to keep Satyam afloat and it was reflected as " understated liability". These 37 small cos served legal notices on MSat, claiming repayment of Rs 1,230 cr, with 18% interest per annum. Seal on his claim M- Sat acknowledged the claim in its audit report & classified it as ' amount pending investigation suspense account'. It was not recorded in the books but bank transactions show an inflow from 37 firms. The reply M- Sat said the claims were legally untenable as there were no entries in the books. The Enforcement Directorate told M- Sat to furnish details of advances and not to return it until instructed. Raju's likely step Raju is likely to enter into a settlement with M- Sat - at between Rs 700- 900 cr - to avoid a prolonged legal battle.

In fact, M- Sat acknowledged this claim in its audit report released a couple of days ago, restating the company's accounts for 2008- 09 and 2009- 10. This claim was classified separately as ' amount pending investigation suspense account'. Raju, in his confession statement of January 7, 2009, said he had arranged for Rs 1,230 crore for Satyam to keep its operations going and it was reflected in the balance sheet of September 30, 2008, as " understated liability". However, it was not recorded in the books, but the bank transactions indicated that there was an inflow of this amount into Satyam from about 37 firms.

A day after Raju had confessed to the fraud and a day before his arrest, the company received letters from these 37 companies requesting confirmation by way of acknowledgement that the amounts were " temporary advances made to the company". Subsequently, these companies served legal notices on the M- Sat management on August 4 and 5, claiming repayment of Rs 1,230 crore, besides damages/ compensation at the rate of 18 per cent per annum from the date of advance. MSat replied by stating that the claims were legally untenable as there were no entries in the books of accounts. The Enforcement Directorate (ED), which investigated the matter under the Prevention of Money Laundering Act, directed the new management to furnish details of the advances and not to return the money until further instructions.

In November, four of these 37 firms filed suits in the City Civil Court, Secunderabad, for recovery of the amount. Subsequently, the remaining 33 companies also filed similar suits.

While M- Sat proposes to offer 60 per cent of the claim, or around Rs 700 crore, Rajus are learnt to asking for at least 80 per cent, or Rs 1,000 crore. It could be settled at around 70 per cent.

"This is still in the nascent stage. One does not know the final outcome," sources said.

On record, M- Sat chairman Vineet Nayyar told the media that there was no possibility of any out- of- court settlement.

"The issue is sub- judice and I cannot talk further on the litigation," he said.

Even as M- Sat was struggling to deal with this whopping claim, it received yet another jolt from Maytas Infrastructure, a sister concern of Satyam, ( till recently headed by Raju's son Teja Raju), which also claimed that inter- corporate deposits (ICDs) worth Rs 390 crore were routed to Satyam.

Maytas Infra, later taken over by IL& FS, argued that some of the shell companies floated by Raju had borrowed money from Maytas and diverted it to Satyam. IL& FS has taken the matter to the ministry of corporate affairs seeking intervention.

However, M- Sat has stoutly rejected these claims.

Courtesy: Mail Today