The Satyam fraud investigations are meandering into irrelevance. A curious convergence of political, regional and business interests is conspiring to derail the probe.
The prime minister does not want Satyam to sink as it might dent India's global IT image. The UPA's political leadership cannot let a corruption scandal damage Andhra chief minister YS Rajasekhar Reddy (YSR) in an election year. With him goes the Congress party's hope of returning to power as head of the next coalition.
Turfed out of Bihar by the NDA, the political interests of the Lalu Prasad Yadav-led Rashtriya Janata Dal (RJD) mesh well with those of the Congress. It partly explains the Andhra-Bihar nexus in the Satyam probe.
The man at the centre of it all, company affairs minister Prem Chand Gupta, is from the RJD. The Andhra Pradesh DGP is a Yadav from Bihar, SSP Yadav. The policeman handling the Andhra CID probe is inspector-general of police VSK Kaumudi. When he was with the CBI some years back, Kaumudi probed Lalu's fodder scam. He obviously knows a thing or two about Lalu's secrets. Lalu and the Andhra CM, thus, have an interest in helping each other out.
There is now strong evidence that the Satyam probe is being effectively sidetracked. Last week, Prem Chand Gupta announced that the Serious Fraud Investigation Office (SFIO) would be looking into as many as 350 companies linked to Satyam promoter B Ramalinga Raju. This is a disaster. The SFIO is incapable of investigating so many companies in any reasonable time. Any probe that can continue till kingdom come is essentially a plan to scuttle the investigations.
Now let's see how the central and state governments did everything to misdirect the probe. On January 7, Raju -- of his own volition --sent a confessional letter to the stock exchanges admitting to India's biggest corporate fraud. Nobody forced him to make this confession. To obtain a conviction all that the probe agencies needed to do was to reconfirm the confession in legally valid terms so that he could be convicted. But they didn't do that.
For two days, both Centre and state sat on their hands. The Andhra CID jumped into the act only when it seemed like Sebi might get to Raju before anybody else. They arrested him, and shoved him into judicial custody. No less a person than former Sebi chief M Damodaran has said that this was essentially a ploy to protect Raju, not to ferret out the details of the fraud from him.
It took Sebi four weeks, and an application to the Supreme Court, to finally get anywhere near Raju. Meanwhile, politicians must have had enough time to destroy the evidence, threaten Raju into silence, and obtain his concurrence on whatever plot they had in mind to get him and themselves out of the mess.
It is obvious who is really being protected: the Andhra chief minister. The Satyam scandal was essentially about the misuse of corporate funds for private purposes, including the purchase of benami land and wangling lucrative contracts from the Andhra government. It is impossible for land deals to be done in the state without the chief minister's nod.
Mind you, YSR is not your gentleman CM either. He is "widely believed to have risen to power on the basis of murder, loot and terror", a senior columnist wrote in 2004. You can say that murder, loot and terror is often the currency of state-level politics, but you can't get away from the fact that YSR will stop at nothing to get what he wants. His son managed to obtain crores in funding for his newspaper merely by calling on businessmen friends. You have to be stupid to believe that businessmen will cough up crores to invest in losing newspaper ventures. The chief minister's son is not known for his journalistic credentials.
But it's not all the Andhra CM's doing. At the Centre, he got help from Prem Chand Gupta, who has done everything to lead the probe in the wrong direction. On January 11, he announced the names of Deepak Parekh, Kiran Karnik and C Achuthan as Satyam's new board members. The board was supposed to elect a chairman the next day. It didn't happen. Media reports were that Gupta wanted his say on appointments.
The tussle ended only when an insider and Raju crony, AS Murty, was appointed CEO. Quite apart from the impropriety of appointing someone closely linked with Raju to run the company, the chairman's appointment followed that of the CEO. If the board was truly independent, it should have insisted on the opposite: chairman first, CEO next.
The Satyam saga is thus headed towards a stalemate, with truth being the ultimate casualty. The last act in the farce will probably happen after the Lok Sabha elections, when Ramalinga Raju can go back on his January 7 confession. He could say he was pressured into sending the confession, possibly a political or business blackmailer. Even better, he could say the confession was a forgery. It's happened before. After that, the Satyam probe will have reached a dead end.
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