Satyam case: ED chargesheet against Raju, others

Hyderabad: Enforcement Directorate (ED) on Friday filed a charge sheet against Satyam Computers founder Ramalinga Raju and 212 others, including some firms, for allegedly laundering funds under a "corporate veil" to perpetrate the accounting scam that rocked the business world.

ED filed a bulky prosecution investigation report before the XXI Additional Chief Metropolitan Magistrate cum Special Sessions Judge here today seeking to "prosecute the accused for the offence of money laundering" under the Prevention of Money Laundering Act (PMLA).

The ED report said that Ramalinga Raju and the other accused, who have also been probed by CBI, "derived proceeds of crime from the sale and pledge of inflated shares of M/s Satyam Computers and Services Ltd (SCSL)".

The report further noted, "it transpires that the accused resorted to inter-connected transactions, so as to ensure that crime proceeds were distanced from its initial beneficiaries, and laundered the said proceeds under the cover of the corporate veil, with an ulterior motive to project the properties so acquired as untainted ones".

ED also highlighted the modus operandi used by the accused of receiving "bonus shares, shares under Employee Stock Option Schemes and dividends on the inflated shares of M/s SCSL".

Satyam case: ED chargesheet against Raju, others

The agency has already attached properties worth Rs 1,075 crore in the case. ED, which operates under Finance Ministry and exclusively deals with violations of foreign exchange regulations and money laundering, is part of the multi-agency probe held into the accounting scam.

ED has also interrogated prime accused Ramalinga Raju, his brother and former Satyam MD, Rama Raju, and the others named in the case. It had registered a case against the Satyam founder and his family under PMLA, which defines money laundering offences as those involving money derived from any activity connected with the proceeds of crime. The Act provides for the freezing and seizure of the proceeds of crime.

The ED prosecution complaint (charge sheet), names 213 accused — 47 individuals (among them Raju and nine other accused already named in the CBI charge sheet) and 166 firms, including SCSL.

So far, 350 immovable and 5 movable properties, valued at a cumulative Rs 1,075 crore, have been attached in the case, ED said. "The Directorate of Enforcement has since taken possession of most of the attached properties. The investigation is still going on in India and abroad for further identification of the proceeds of crime," the report stated.

According to the ED charge sheet, Ramalinga Raju conspired with the other accused and published inflated balance sheets and annual financial statements continuously during the period 2001-2008, thereby projecting a very rosy financial status for SCSL to keep share prices over-valued and lure ordinary investors into buying the company's shares.

CBI, which also investigated the Satyam fraud, filed three charge sheets under the relevant sections of IPC against Ramalinga Raju and others. Since the offences under Section 467 (forgery of valuable security, will,), 420 (cheating) and 471 (using as genuine a forged document) of IPC are scheduled offences under PMLA, ED has probed the money laundering "committed by the accused", as mentioned in the CBI charge sheet.

The report said that Ramalinga Raju, his relatives and associates, floated 327 front companies which were used to layer the proceeds of crime. ED said the probe had revealed that the accused purchased movable and immovable properties in their names, in the names of front companies and in the names of close relatives and associates who were also directors in the said companies. These directors have also been named in the ED charge sheet.

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