Satyam investigation becoming farcical

The Satyam story was bad enough to begin with — corporate fraud of this order — Rs 7,800 crore — does no good to the image of either India Inc or the country. But what followed, and is still unfolding, has been far worse. Almost a month after Raju stunned us with his confession we are nowhere near getting to the bottom of what transpired. Instead the story just gets murkier by the day.

In a twist that is so strange it could pass for something straight out of Ripley’s “Believe It Or Not”, the agencies most competent to investigate the crime — capital markets regulator SEBI and the Serious Fraud Investigation Office — continue to be denied access to B Ramalinga Raju, the main accused. Instead, the state police, perhaps the agency least qualified or competent to investigate sophisticated financial frauds, is looking into the crime. And, needless to say, are making heavy weather of it. Periodic leaks to the press — whether about the number of employees on the company’s rolls or the genuineness of fixed deposits reportedly held by the company — have only made matters worse.

Yesterday we had the sorry spectacle of the minister for company affairs Prem Chand Gupta publicly expressing his helplessness in the matter citing state jurisdiction. The headquarters of Satyam Computers might be in Hyderabad but the ramifications of the crime go well beyond the state. Financial fraud on this scale is not a matter for the state police but for a federal agency, whether SEBI or SFIO or CBI to investigate. There should be no dispute about the respective jurisdictions of the Centre and the state. Even if the state police can technically claim first right to investigate, surely the central government can intervene. Remember, the same party rules at the Centre and in the state. By not seeking help from SEBI and SFIO, the state CID has ended up giving the impression that it is not fully transparent and non-partisan. It is still not late to remedy the situation.