Public RelationsSatyam's Nipuna deals 'concealed' facts
Raju and associates ‘forged board resolutions’ to secure loans.
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Satyam Computer Services (SCSL) founder Ramalinga Raju, former managing director Rama Raju and former chief financial officer V Srinivas, had long been in the practice of obtaining the approval of board members for important decisions taken by the company without disclosing the facts to them, according to sources tracking developments in the Central Bureau of Investigation (CBI) probe of the financial scandal.
Just as in the earlier reported case of the two Maytas companies, they had kept the company’s board of directors “in the dark” with regard to the source of funds for the purchase of equity shares of Nipuna Services Pvt Ltd, is another charge.
Nipuna, a business process outsourcing company, is a subsidiary of SCSL. It was corporated on June 5, 2002, with the Raju brothers and Srinivas as directors, among others. It had allotted redeemable cumulative preferential shares worth $20 million to Olympus BPO Holdings Ltd of Mauritius and Intel Capital Corporation (Cayman) Inc of the US, with an option to redeem the shares after the maturity period on December 31, 2006, with 7.5 per cent cumulative interest compounded annually.
However, before the maturity period, the Satyam founder “persuaded” the two multinational companies by giving them an option to sell 50 per cent of their shares to SCSL and redemption of the remaining 50 shares by Nipuna. Accordingly, on November 11, 2006, an agreement was reached with a provision for payment of $35-45 million by SCSL to the two companies.
The proposal to purchase Nipuna’s shares by SCSL was placed before the board of directors on January 19, 2007, and got approval. “The accused kept the board of directors in the dark with regard to the source of funds and also regarding the fiscal health of Nipuna, which otherwise was a loss-making company since inception and was not possessing any tangible assets,” sources quoted from a report.
For the purchase of Nipuna shares, the CBI is stated to have found that Raju and his associates borrowed funds “without the knowledge consent/approval of the board” from 15 front companies floated by them. But the funds thus borrowed were shown as sale proceeds of SCSL and marshalled from the company’s account at Bank of Baroda in New York.
“Even though M/s SCSL did not have adequate free reserves, they have submitted forged and fabricated documents to reflect a rosy financial position to the board and obtained (its) approval to acquire the shares of M/s Nipuna Services Pvt Ltd,” the CBI is learnt to have stated.
Sources said the CBI had also found out that Raju and his associates had generated “forged board resolutions” for submitting to the banks to secure loans.
From the year 2000 to 2008, SCSL borrowed Rs 1,221.16 crore. The breakup was HDFC Bank (Rs 530 crore), HSBC Bank (Rs 185 crore), Citibank (Rs 223.87 crore), Citicorp Finance (India) Limited (Rs 222.28 crore), BNP Paribas (Rs 20 crore) and ICICI Bank ( Rs 40 crore).
According to the CBI, sources said, these loans were availed without board approval. When banks insisted on production of the board resolution, Raju and his associates “prepared forged board resolutions and submitted them.”