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Serious fraud probe into Maytas firms
Tribune News Service

New Delhi, January 19
Suspecting a “nexus” between the fraud in Satyam Computer Services Ltd and other companies promoted by Ramalinga Raju's family, the government today ordered a probe by the serious fraud investigation office (SFIO).

Corporate Affairs Minister PC Gupta told reporters here: “Inspectors investigating the matter have informed that there seems to be a nexus between the events that have taken place in Satyam, Maytas Properties and Maytas Infrastructure and a probe by the SFIO had been ordered.”

The government has “approved and authorised the SFIO inspectors to obtain such books, records, papers as they deem necessary of Maytas Properties and Maytas Infrastructure,” he said, adding that it was necessary to obtain information, records and books from the above two companies.

The SFIO has already launched a probe into the Satyam fraud and has been given three months to file its report.

Satyam founder Ramalinga Raju on January 7 admitted to a Rs 7,800-crore fraud in the IT company. He said he had been cooking the books for years and the Maytas acquisition bid was an attempt to fill fictitious assets with real ones.

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Scandal has hit biz sentiment, says Citigroup

New Delhi, January 19
Citigroup said on Monday the Satyam scandal had further dented business sentiment in India, which can affect flow of funds from investors in the days ahead.

“With business confidence already at a five-year low, the Satyam scandal has further dented sentiment and cast a shadow on hidden leverage of Indian businesses, especially those that are family-run,” its research arm Citigroup Global Market said.

It said this has also had repercussions on the investor-confidence in the economy and could affect flows in the near term. It apprehended that one could see further holes in the system as the downturn worsens, with a total of three of IT firms now barred from World Bank projects, coupled with the resignation of a host of directors and senior officials in the corporate sector.

India has been faring poorly in terms of Transparency International's (TI) Corruption Perception Index, which ranked it at 85 of 180 countries in 2008. In a separate Bribe-Prayers Index, TI ranked India almost at the bottom of the list — at 19th position among 22 countries.

It said closely-held structure of many Indian companies suggest a need for improved transparency and accountability for independent directors. “Apart from improving disclosure standards, re-auditing norms, and greater shareholder activism, there is also a need to counter corruption.” — PTI

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