114 companies, 1-room: Kin of tainted Satyam founder under scanner
What's the story
In a shocking discovery, the family members of founder and ex-chairman of Satyam, B. Ramalinga Raju were found operating 114 shell companies from a one-room office in Hyderabad.
The operation came to light after Registrar of Companies officials raided the one-room office in Jubilee Hills.
Notably, these 114 companies are part of the ongoing case being investigated by the CBI and Enforcement Directorate.
Here's more.
Do you know?
First off, what was the infamous Satyam scam?
The Satyam scam, involving Ramalinga Raju's Satyam Computer Services, came to light in January 2009 when Raju resigned as chairman and confessed that he had manipulated accounts in several forms, collectively worth Rs. 14,612cr. The confession rocked both the domestic and the international corporate community.
Discovery
How ROC officials found about the 'shell companies'
While investigating shell companies operating out of Hyderabad, the Hyderabad Regional Office of the ROC found that 114 shell companies were operating out of a single office - the largest number of firms registered with a single company in Telangana and Andhra Pradesh.
Upon further investigation, they found that the office in Jubilee Hills belonged to financial service provider SRSR Advisory Services Pvt. Ltd.
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ROC official says prima facie evidence suggests financial foulplay
"It's premature to call them shell companies, but prima facie evidence suggests financial wrongdoings. We will have to look at the documents we collected today, evaluate and come to conclusions," an ROC official involved in the raid told The News Minute.
SRSR Advisory
Ramalinga Raju's kin has ties to SRSR Advisory
SRSR Advisory Services was founded in 1999, and Ramalinga Raju's brother, B. Suryanarayana Raju, had earlier served as the company's managing director.
Suryanarayana Raju was also the former director of SRSR Holdings.
Currently, SRSR has Namburi Ramaraju and Namburi Siva Linga Ravi Prasad Raju as directors.
All the aforementioned people have already been named in CBI and ED chargesheets pertaining to the Satyam scam.
SRSR's response
SRSR Advisory defends its running of 114 companies
Following the findings, SRSR officials, via a lawyer associated with their case, refuted all allegations of financial wrongdoings.
The lawyer acknowledged that the 114 companies had been named in CBI and ED chargesheets, but argued that the companies had to be kept active till the cases were resolved as they had attached assets which could potentially be returned to their owners.
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The statement by SRSR Advisory's lawyer
"These companies have acres of land and 287 properties and other assets, including fixed deposits attached to them...We can't close these companies, as, if cases against these companies are struck down, the attached property can be returned to the rightful owners," said SRSR Advisory's lawyer.