Raju's bail is a slap in the face of CBI and the government
The bail given to Satyam promoter Ramalinga Raju is testimony to CBI's failure to nab a self-confessed white collar criminal
This can happen only in India. The story today is not that Satyam promoter B Ramalinga Raju has been given bail after nearly three years in comfortable custody, but that the Central Bureau of Investigation (CBI) is so incompetent that it cannot catch a self-confessed white collar criminal and get him convicted in double-quick time.
It is an indictment of both the CBI and its political masters.
The Satyam scam did not begin by the auditors or the investigative agencies catching Raju doing the dirty. It came from Raju himself, when he sent a letter of confession on 7 January 2009 to the stock exchanges and the company's board saying he had cheated shareholders by overstating profits and cash balances and understating liabilities (Here’s the letter).
This was not a confession extracted in dubious circumstances or under duress. It was sent voluntarily. All the police or the CBI needed to do was get him to sign the confession before a magistrate, so that it would be admissible as evidence, and put him away.
But two years and 10 months after that confession, we are nowhere near a conviction because Raju apparently has since retracted his confession.
If this is not sheer carelessness on the part of the prosecuting agencies and the political class, what is?
What was the political motive behind burying the investigations? The answer, in one line, is the late YS Rajasekhara Reddy (YSR), whose involvement with the Rajus is undeniable.
The Satyam scam happened just before the 2009 general elections where the seats from Andhra Pradesh were critical for the Congress to return to power. The Manmohan Singh government helped YSR bury the scam.
As Firstpost wrote some time ago, Satyam had close ties to the YSR government because Ramalinga Raju had bagged several infrastructure deals from the state - many of which were barely above board. These deals were done through Maytas, the infrastructure company (Maytas is the reverse of Satyam) that Raju had tried to merge with Satyam to cover up for the hole he had left in Satyam’s finances by fiddling with its accounts.
So when Ramalinga Raju wrote his fateful letter to the stock exchanges confessing that he had fudged accounts and defrauded the company to the tune of over Rs 7,000 crore, the first man to run for cover was YSR.
For two days after his confession, YSR’s police force curiously kept away from Raju – they failed to arrest him though they knew where he was. In fact, they jumped in only when they heard that Sebi officials were planning to interrogate him. Who knows what kind of beans Raju might have spilt if Sebi was given unrestricted access?
In fact, the state government and the courts kept Sebi far away from the accused – till the Supreme Court again intervened to grant Sebi the right to question Raju and his financial wizards on how they managed to hide a fraud of such proportions for so long.
The next thing YSR did was to ensure that the Congress leadership toed his line. He convinced them that they would lose the 2009 elections if they didn’t help him out in containing the political fallout of the Satyam scam. There was clearly a convergence of political and economic interests: while Manmohan Singh wanted to safeguard India’s IT reputation, Sonia Gandhi wanted to reap high parliamentary numbers from Andhra Pradesh. And YSR wanted to save his gaddi.
To hide the twin Satyam-Maytas scandals, the Congress had to do three things. First, take control of the two companies so that no one else starts looking under the carpet for blood stains. Second, make sure that the body is burnt so that there is no autopsy. And third, make sure that the investigations went nowhere.
The first goal was achieved when the government superseded the Satyam board, and then made quick preparations for its sale. The second happened when the Mahindras were sold the company, and control of Maytas was given to IL&FS, an infrastructure and finance company with strong political connections. The third happened when the government sent the CBI in and shifted control of the probe to the Serious Frauds Investigation Office (SFIO). While CBI is prosecuting Raju in a fast track trial court, we haven’t heard much from the exertions of the SFIO.
Now, with CBI making no progress with the Raju case, and with the man himself getting bail, the scandal may well be buried.
(Note: Parts of this story were earlier published by Firstpost here)
Watch video:SC grants bail to ex-Satyam CEO Ramalinga Raju
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