Satyam Founder Raju Granted Bail by Indian Court in Corporate-Fraud Case
Raju, whose bail petition on health grounds was rejected by the country’s Supreme Court in March, was granted bail by Judge Raja Elango, his lawyer S. Bharat Kumar said by telephone. Kumar said he couldn’t immediately provide any further details as he was yet to receive a copy of the judgment.
The Satyam founder has been in custody in India since January last year when he wrote a letter to the board explaining the financial irregularities. The letter touched off India’s biggest corporate-fraud inquiry. The admission triggered a stock slump and a government takeover that led to sale of the Hyderabad-based software-services exporter to Tech Mahindra Ltd.
“It appears that the bail has been granted on health grounds, and if that is the case then it does not dilute charges against Raju,” said Barunesh Chandra, a New Delhi-based independent legal consultant. “It is surprising that the investigation is on even after one-and-a-half years. Ideally the investigating agencies should have completed that process and the trial should have started.”
Stays in Hyderabad
Raju was allowed to be freed on bail on condition he stays in Hyderabad, Press Trust of India reported. He will have to provide two bonds of 2 million rupees ($43,000) each, according to the report.
Investors in the U.S., where Satyam sold American depositary receipts in 2001, filed at least a dozen class-action lawsuits that have been consolidated before U.S. District Judge Barbara Jones in New York. On Nov. 9, Satyam and former auditors Price Waterhouse and Lovelock & Lewes said the U.S. lawsuits should be dismissed because the litigation belongs in India.
Raju, who was hospitalized in September for a suspected heart attack, is currently undergoing treatment at a hospital in Hyderabad, Press Trust said, without giving details on his health condition.
Judge Jones in January granted Raju and his brother Rama Raju, Satyam’s former chief executive officer, pauper status in U.S. litigation, meaning the two men won’t have to pay filing fees and other court costs tied to the litigation because of their financial condition. Srinivas Vadlamani, the company’s ex- finance chief was also approved for the status.
India’s Central Bureau of Investigation, which has charged Raju and eight others including his brother Rama and Vadlamani of faking invoices and falsifying accounts, in January filed fresh charges against Raju and five others. The six men inflated Satyam’s tax liability by 5.26 billion rupees by boosting its revenue through fake sales invoices and non-existent interest income from deposits that were never made, investigators said.