Early warning to prevent Satyam repeat: Khurshid

The Union ministry of corporate affairs is putting in place an ‘early warning system’ to prevent recurrence of frauds like that of Satyam Computer Services, according to minister Salman Khurshid.

"Experts are working on it," he said, adding that details of the proposed system were yet to be finalised.

Satyam’s founder-head, Ramalinga Raju, had admitted to a multi-crore accounting fraud spread over years — termed the biggest corporate fraud in the country — in January.

Stating his ministry was looking forward to a quick trial of the accused in the Satyam case, he said a request had been made to the Andhra Pradesh high court to set up a separate court to deal with the case. "The high court has agreed to nominate a court and it must be in the process of doing it," he said on the sidelines of a national conference on corporate governance held here on Friday.

The minister said investigation into the Satyam case had almost been completed by the Serious Fraud Investigation Agency (SFIO) and the Central Bureau of Investigation (CBI). While the CBI would be filing an additional chargesheet, he was waiting for the SFIO’s final report.

Meanwhile, he said, the Enforcement Directorate and the internal revenue services would continue their investigation, particularly with regard to the alleged diverting of funds by the accused in the Satyam fraud case. "We don't have any firm idea yet," he said, when asked on this.

The minister said he was "quite pleased" with the functioning of the successor company, Mahindra Satyam. Adding that retrenchment of some employees of the fraud-hit corporation by the new owners was in tune with the pattern of the entire software industry at present.

Khurshid said investigating agencies have got enough material to successfully prosecute the accused in the Satyam case. He said it was for the CBI to decide if there was a need to take action against independent directors of the IT company.

And that the restatement of Satyam’s accounts was a complex process and hence it was taking time.

About inducting a strategic investor into Maytas Infra, a listed company run by the kin of Ramalinga Raju, the minister said it was for Maytas to decide.

Earlier, addressing the conference, the minister said there was a need to restrict the number of directorships an individual could hold. "We don't have superhuman beings to be the directors of 20-25 companies," he said, adding that"directorship is not just a joy ride but a position of responsibility."

He also said investigation agencies under his ministry need to specific powers to enable a fair and quick investigation into corporate frauds.