Andhra chief minister seeks CBI probe into Satyam fraud

February 10th, 2009 - 11:54 am ICT by IANS  

Manmohan SinghHyderabad, Feb 10 (IANS) Under fire from the opposition, Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy has written to Prime Minister Manmohan Singh seeking a Central Bureau of Investigation (CBI) probe into the Satyam Computer Services fraud.

In a letter sent late Monday, the chief minister said it would be appropriate if the CBI takes over the investigations so that coordination with various investigation agencies, including Satyam’s overseas operations, can be better achieved.

“The Andhra Pradesh police and the state CB-CID (Crime Branch-Criminal Investigation Department) will fully cooperate with the CBI once it takes over,” he said in the letter.

The chief minister dashed off the letter hours after his government came under scathing attack from the opposition parties in the state assembly for not referring the case to the CBI despite the fact that the issue relates to several central agencies.

The letter, the second in 10 days, was sent a few hours before the government’s reply to the debate on Satyam fraud Tuesday.

YSR, as the chief minister is popularly known, said though the CB-CID had been in constant touch with other investigating agencies, there were issues that needed to be looked into by central government organisations such as the Income Tax department, Enforcement Directorate, Registrar of Companies, Ministry of Company Affairs, Serious Fraud Investigation Office, and the Securities and Exchange Board of India.

The investigation so far has revealed that Satyam had inflated its bank accounts for many years. This inflation of the current account balance has been testified by bank officials concerned. In addition, the firm has raised money from non-banking financial companies by pledging shares.

More than 300 firms were reportedly floated by Satyam founder B. Ramalinga Raju and his close relatives as directors and promoters and this facilitated insider trading of shares, the chief minister said.

The chief minister in his earlier letter to the prime minister on Jan 28 had stated that he was open to a CBI probe. He had said that the centre may order a CBI probe, if deemed appropriate.

The state government has come under criticism for not referring the case to CBI even a month after the scam broke out. Participating in the debate in the assembly Monday, leader of opposition and Telugu Desam party president N. Chandrababu Naidu had alleged that the Congress government was trying to cover up up the Rs.78 billion ($1.43 billion) fraud by not handing over the investigations to CBI.

He wondered how the CB-CID could investigate the case when the company had operations in different parts of the country and 66 foreign countries.

The former chief minister also alleged that CB-CID inquiry was ordered to obstruct probe by central agencies like SFIO and SEBI.

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