New Delhi: The original whistleblower in the Rs 14,000 crore Satyam scam, which has now landed the company’s former chairman B Ramalinga Raju in jail, was India’s metro-man E Sreedharan, reveals a letter he had sent to then Planning Commission deputy Montek Singh Ahluwalia.
In the letter, Sreedharan, as Delhi Metro Rail Corporation’s (DMRC) chief, had raised the red flag on the functioning and other aspects of Ramalinga Raju’s companies and a charity controlled by him and his family.
It all started in September 2008, when Sreedharan, referring to the Hyderabad Metro Rail project that was awarded to a consortium of companies led by Maytas Infra Ltd, wrote a letter to the then Planning Commission deputy chairperson Montek Singh Ahluwalia that the Andhra Pradesh government’s action of making “available 296 acres of prime land ... to the developer for commercial exploitation was like selling the family silver.”
In the said letter, he had added that it could lead to a “big political scandal some time later.”
Maytas Infra was promoted by Teja Raju, son of Ramalinga Raju, and other members of Raju’s family.
Raising concerns about the government’s decision to award the Hyderabad Metro project to Maytas on the build-operate-transfer (BOT) model, Sreedharan said in the letter: “The BOT operator (Maytas) has a hidden agenda which appears to be to extend the Metro network to a large tract of his private land holdings so as to reap a windfall profit of four to five times the land price.”
An official in know of the developments at Hyderabad Metro Rail project told on condition of anonymity, “Hyderabad Metro Rail project team was scouting for land and while identifying land owners, it was found that majority of land from where the Metro route would pass through belonged to this particular company.”
“It seemed as if it was pre-planned and that the company knew about the metro rail project well in advance. It was then brought to our chief’s knowledge. It was the classic example how a company that later got the job of the project, had access to the inside information on planning much before its conceptualisation. It helped the company to buy vast stretches of land at a much lower price around the metro route, so that it could be sold at a price multiple times higher and make huge profit.”
After Sreedharan wrote the letter, the Andhra Pradesh government had threatened him with defamation. But it didn’t take much time for the truth to reveal itself and the Metro chief was proved right.
What went wrong with Raju?
According to financial experts, the global meltdown in 2008 jeopardised Raju’s dream. The value of his landholdings drastically fell.
“The money he had invested in buying land got stuck up. In fact, it’s said that a few politicians had invested in this real estate project. But, when they wanted it back to fund the 2009 election, Raju failed to return the money. And, that was the beginning. A web of 356 investment companies was used to allegedly divert funds from Satyam Funds and accounts were fudged. Instead of a windfall, it became Raju’s downfall,” an expert said.
Later, even Ramalinga Raju confessed that he tried to fill in the fictitious assets with real ones, after investors forced Satyam to abort its proposal to acquire Maytas.
In response to the sentence awarded to Raju and nine others, TV Mohandas Pai, the chairman of Manipal Global Education, told Firstpost, “It was a clear case of accounting fraud, inflating of profits and greed, which remain undetected for long. But, the best part is that it has been investigated, and the accused have been prosecuted and sentenced.”
“Though it has taken six years, it’s much better than in the past, when it used to take years. We hope the next time prosecution will be much faster,” added Pai, former member of the Board of Directors of Infosys.
Chartered Accountant Abhishek Aneja says that the case has led to lots of changes, especially in the new Companies Act 2013.
“The new act provides a stricter regime of compliance and harsh penalties including imprisonment of those directly involved including the management and the auditors, as happened with Ramalinga Raju and nine others,” he said.
Noted lawyer KTS Tulsi remarked, “This is one of the major crimes in the electronic age and all business houses need to understand that electronic evidence leaves enough foot print for the investigating agencies to be able to dig up the entire character, which is impeachable. This should act as a warning to all the business houses that any one indulging in forgery, would be at serious risk.”
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Updated Date: Apr 11, 2015 10:11:46 IST