ED Attaches Ramalinga Raju's Assets

In the single largest attachment made under the Prevention Of Money Laundering Act in the country, the Directorate of Enforcement on Thursday attached fixed deposits worth Rs. 822 crore in different banks belonging to B Ramalinga Raju, former chairman of Satyam Computer Services Limited.

According to the Directorate, the proceedings for the Provisional Attachment of Properties under the Prevention Of Money Laundering Act were initiated consequent to the filing of the chargesheets on April 7 and November 22, 2009, by the Central Bureau Of Investigation against Raju and others.

Raju had allegedly conspired with the other accused persons during the period 2001-2008 and lured investors into buying the shares of SCSL, whose prices were inflated due to the falsification of accounts.

Raju and his family members then reportedly offloaded the shares at opportune times and gained wrongfully from them. The offloading of inflated SCSL shares occurred by way of sale or pledging of shares.

The pledging of shares by Raju and his family members was done indirectly by transferring them to SRSR Holdings Pvt. Ltd., in which they were the Directors. In turn, SRSR Holdings pledged the inflated shares with NBFCs, and loans to the extent of Rs. 2171.45 crores were obtained. These loans were circuitously transferred among the 327 front companies floated by Raju, his relatives and his associates to disguise the true source of funds.

The front companies used these loans to buy properties in Andhra Pradesh, Karnataka, Maharashtra and Tamil Nadu.

The Directorate of Enforcement had already attached 354 such properties valued approximately Rs. 250 crores (book value). A part of the loans was also transferred to the SCSL.

The trail of loans derived from the companies in the front revealed that Rs. 822 crores out of Rs. 2,171.45 crores found their way to SCSL and were used for day-to-day expenses like the payment of salaries. Since this amount subsists with the SCSL and constitutes a part of the loans that were derived or obtained by the pledge of SCSL, they fall within "mischief of proceeds of crime" under the PMLA, and are liable for attachment, the ED said.

The ED has attached Rs. 822 crores worth of fixed deposits in the name of SCSL, held with Andhra Bank, Bank of Baroda, IDBI Bank and ING Vysya Bank, as they constitute the "proceeds of crime derived out of scheduled offences under the PMLA".

Consequent to this provisional attachment of properties, a complaint will be filed before the adjudicating authority constituted under the Prevention Of Money Laundering Act for confirming the provisional attachment, according to a press release issued by the ED. (INN)