ED freezes another Rs822-cr deposits of Satyam’s Raju

The Enforcement Directorate today froze fixed deposits worth Rs822 crore belonging to B Ramalinga Raju, founder of the scam-hit Satyam Computer Services, held in Andhra Bank, the Bank of Baroda, IDBI Bank and ING Vysya Bank, the ED said in a statement from its Hyderabad office.

''The deposits have been attached as they constitute proceeds of crime derived out of scheduled offences under the Prevention of Money Laundering Act (PMLA), 2002 committed by B Ramalinga Raju and others,'' the ED said.

The directorate said Raju and his family members raised loans worth Rs2,171.45 crore by pledging shares with non-banking finance companies, based on an inflated value of Satyam shares. These loans were circuitously transferred among the 327 front companies floated by Raju, his relatives and 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.

Reports say this could be the single largest attachment under the PMLA, just as the Satyam fraud, worth Rs1,400 crore, is said to be the biggest ever corporate crime in India. The ED has already attached 354 properties valued at around Rs250 crore.

A management graduate from Ohio University, Raju founded Satyam in 1987 and made it India's fourth-largest IT firm. But, in January 2009, he shocked investors by admitting that the firm's profits had been overstated for years and assets falsified. He spent about two years in a Hyderabad jail before being granted bail by the Supreme Court.

In April 2009, Tech Mahindra, part of the Mahindra group, purchased a controlling interest in Satyam Computer in a government-mandated auction, and the company was renamed Mahindra Satyam.

The company has refused to comment on the latest action by the ED.