Satyam case: SFIO finds serious flaws in land deals

The investigation wing of the Corporate Affairs Ministry, SFIO, has found serious irregularities in the land deals of entities linked with Satyam and companies promoted by the kin of the former Chairman of the IT company, B Ramalinga Raju.

"(The) probe so far shows how these companies had understated their land sale prices on the books. The Serious Fraud Investigation Office (SFIO) has details that companies sold land for 20-30 times higher than the prices shown ...," a senior ministry official told PTI.

Following the disclosure of the Satyam scam, the Corporate Affairs Ministry asked the SFIO to probe the books of accounts of 325 companies including those connected with Satyam and family members of B Ramalinga Raju.

For instance, the official said in the accounts of a company named Swarnamukhi Green Field Pvt Ltd, the cost of land has been shown as Rs 15,00,000 but it was sold for Rs 3.5 crore. Similarly, for Himagiri Green Fields Pvt Ltd, land bought for just Rs 17,00,000 was sold at Rs 8 crore.

Another company Himagiri Biotech Green Field Ltd bought land for Rs 17,00,000 but sold it for Rs 8 crore to raise funds, which got diverted.

The official said most of the 325 companies being investigated were incorporated after September 2005, and according to the SFIO, the plan for diverting funds had been on probably for the last three years.

"The SFIO investigation questions the fairness of the value of land shown on balance sheets," the official added.

The SFIO interrogated Raju, his brother Rama Raju and former Satyam CFO Srinivas Vadlamani on Saturday and two auditors of Price Waterhouse on Sunday, which is likely to throw some light on the way the funds were diverted through land deals.

Raju and his family floated 350-odd companies mainly for land deals, the official added.