Ram Mynampati also cleared of any involvement.
Independent directors on the board of Satyam were not involved in the multi-crore accounting fraud in the IT company and were kept in the dark by founder-chairman B Ramalinga Raju, the Serious Fraud Investigation Office (SFIO) has concluded.
The over 14,000-page SFIO report submitted to the government, which marks the end of the three-month-long investigation, said four independent directors of the company were questioned in connection with the scam.
Sources in the ministry said the SFIO questioned Vinod Dham, Mangalam Srinivasan, KG Palepu and TR Prasad and found they had no knowledge about the falsification of accounts that happened, allegedly, at the behest of Raju, his brother and other top executives of the IT firm.
The SFIO also questioned the then whole-time director and senior executive Ram Mynampati but found no evidence linking him to the scam, sources said.
The government had, on January 11, ordered an SFIO probe into the scam soon after Raju admitted to a Rs 7,800-crore fraud at the company, wherein he disclosed that he had falsified profits for several years. The role of independent directors had come under the scanner in late December itself, when Satyam said that its board had unanimously approved a proposal to acquire two firms promoted by Raju’s family — Maytas Infra and Maytas Properties.
Satyam had to abandon the deal after investors opposed it strongly and thereafter Raju disclosed that the company’s profits were overstated and the Maytas deal would have allowed him to replace fictitious assets with real ones.
However, some of the independent directors later said that the approval for Maytas deal was not actually unanimous and it was subject to certain conditions. All the independent directors had resigned later.
Prasad had told PTI in January that he and some other independent directors had supported the Maytas acquisition on “the explicit stipulation that the acquisitions be based on valuation derived from notifications of regulators and government”.
Clarifying his stand, as to why the independent directors did not block the Maytas deals, Prasad had said that “these management initiatives were considered against the backdrop of imminent hostile takeover threat”.
Raju had made an emotional pitch that the company faced a takeover threat from IBM and their likes, and to avert which he wanted the board’s support to diversify into other areas. To avoid this, Raju urged the members, in an informal pitch, to take what is known in the corporate world as a ‘poison pill’. His suggestion was that Satyam should enter sectors where IBM and their likes would have no interest, to deter hostile takeovers.