Satyam's independent directors clean: SFIO

New Delhi, Apr 17 (PTI) Independent directors of India's
beleaguered IT major Satyam were not involved in the
multi-crore accounting fraud in the IT company and were kept
in the dark by founder-chairman B Ramalinga Raju, the Serious
Fraud Investigation Office has concluded.

The over 14,000-page report submitted to the government,
marking the end of three month-long investigation, the probe
agency of the Corporate Affairs Ministry said four independent
directors of the company were questioned in connection with
the scam.

Sources in the ministry said SFIO questioned Vinod Dham,
Manglam Srinivasan, K G Palepu and T R Prasad and found that
they had no knowledge about the falsification of accounts that
happened allegedly at the behest of Raju, his brother and
other top executives of the IT giant.

The SFIO also questioned the then whole-time director and
senior executive Ram Mynampati but found no clear evidence
linking him to the scam, sources said.

The government had, on January 11, ordered an SFIO probe
into the scam soon after Raju admitted to a Rs 7,800-crore
fraud at the company, wherein he disclosed that he had
falsified profits for several years.

The role of independent directors had come under scanner
in late December itself when Satyam said that its board has
unanimously approved a proposal to acquire two firms promoted
by Raju's family -- Maytas Infra and Maytas Properties.

Satyam had to abandon the deal after investors opposed it
strongly and thereafter Raju disclosed that the company's
profits were overstated and the Maytas deal would have allowed
him to replace fictitious assets with real ones.

However, some of the independent directors later said
that the approval for Maytas deal was not actually unanimous
and it was subject to certain conditions.

All the independent directors had resigned later.

Prasad had told PTI in January that he and some other
independent directors had supported the Maytas acquisition on
"the explicit stipulation that the acquisitions be based on
valuation derived from notifications of regulators and
government".

Clarifying his stand, as to why the independent directors
did not block the Maytas deals, Prasad had said the "these
management initiatives were considered against the backdrop of
imminent hostile takeover threat."

Raju had made an emotional pitch that the company faced a
takeover threat from IBM and their likes, to avert which he
wanted the board's support to diversify into other areas.

To avoid this, Raju urged the members, in an informal
pitch before the meeting commenced, to take what is known in
the corporate world as a 'poison pill'. His suggestion was
that Satyam should enter sectors where IBM and their likes
would have no interest, to deter hostile takeovers. PTI SHS
PMR
NNNN