Raju inflated Satyam staff nos by 30%: Prosecutors

Contrary to the claims of Satyam Computer Services founder B Ramalinga Raju's statement that there were 53,000 associates in the company, only 40,000 are actually on the rolls currently. Raju had confessed this to the CID during the four-day police custody, which ended today, according to public prosecutors Ajay Kumar and Gangaraju Prasad.

Raju also admitted to fudging accounts, manipulation of records, transfer of shares and conduct of benami transactions, according to the public prosecutors, who pleaded with the Nampally court today to extend the police custody of Raju brothers and former chief financial officer Srinivas Vadlamani by another two days. The court, however, has extended the custody by a day.

The plea came up for hearing at about 12.20 pm. The public prosecutors put before the judge that the accused have revealed purchasing thousands of acres of land.

The accused, they say, have revealed of at least 400 benami transactions apart from floating companies in fictitious names. The public prosecutors said four days given for custodial interrogation was not enough as some time was lost for breakfast, lunch and medical examinations of the accused.

As a result, the interrogation remained inconclusive.

They added that Ramalinga Raju admitted to have transferred shares to his brother Suryanarayana Raju and to his mother Appalanarsamma. This resulted in huge loss to small investors. The fixed deposits of Rs 3,300 crore were fictitious.

The accused were also likely the brain behind a forged HDFC bank statement.

The HDFC branch (Basheerbagh) had clarified to the police that it had not issued any statement to Satyam. It now requires to establish who forged the bank letter, the public prosecutors said adding that the CID has written to six other banks to provide details relating to Satyam transactions and the police was expecting a reply from them shortly.

According to them, the accused have diverted Rs 20 crore a month for five years. However, the big question -where has the money gone- remained unanswered. The prosecutors also did not rule out insider trading.

The CID had already seized some documents, laptops and other evidence but they are yet to be deciphered and confronted with the accused. The offence is multi-dimensional and four days is not enough for questioning, the government lawyers said.  The accused are not yet confronted with the seized documents.

The police was gathering details on Akula Rajaiah, who allegedly brokered land deals for Ramalinga Raju and villagers in land deals.

Countering the plea for extension of the custody, defence counsel said that the police have not confronted any material evidence and have only conducted oral interrogations. The plea by the CID for extension of the custody amounted to review of order (given by the court). Any extension should be plead in a higher court, said Ramalinga Raju's lawyer team.

Advocate Bharath Kumar said various agencies like the Registrar of Companies, Sebi, and CB CID have seized related documents and computers on January 11 and the police have not made any effort to call the documents from them to confront the accused during the interrogation.

The defence counsel said the police interrogated former chief financial officer Srinivas Vadlamani (accused No 3) only for an hour everyday during the four day custody given to them. Searches were also conducted at his house and some documents were seized. Even these were not confronted. They argued that everything that needs to be seized has been already seized.

The interrogation was done under a closed circuit TV with the accused having no knowledge of who is watching them. The defence said there was no connection between land broker Akula Rajaiah and the accused.