Supreme Court has reportdedly stayed Enforcement Directorate’s proceedings against IT major Tech Mahindra in money laundering case.
On May 7, Tech Mahindra sought urgent intervention by the Supreme Court to quash money laundering charges pursued by the Enforcement Directorate related to Satyam Computer Services, the scam-tainted company that was acquired and later merged with it by TechM. The company said the government and the various investigating authorities cannot accuse the merged entity for offences that they believe were committed by the earlier Satyam management. TechM warned that the fresh money laundering charges would destroy the company as no one would like to deal with a company that was tainted.
The case was argued by Kapil Sibal along with senior advocate KV Vishwanathan before a three-judge bench comprising Justices TS Thakur, RK Agrawal and R Banumathi. Justice Thakur sought a response from additional solicitor general Maninder Singh on the petition. The ministries of corporate affairs and finance are parties to the petition. TechM had moved the Andhra High court for relief. A single judge bench ruled in its favour, but that was later overturned by a division bench. The company then moved the top court.
The company claimed that it took over Satyam after it was invited by the ministry of corporate affairs to infuse fresh funds and take over Satyam following the fraud perpetrated by its founders.
In 2009, founder and then chairman Ramalinga Raju wrote a letter to the Securities and Exchange Board of India about inflating the company’s books and reporting non-existent cash and bank balances of more than Rs 5,000 crore. The scandal took the company to near collapse, before TechM took control through a government-monitored auction.
TechM had earlier claimed that Satyam’s books didn’t reflect liability worth Rs 1,230 crore on account of funds lent by other group companies, but later retracted the statement. However, 37 companies owned by Raju issued notices to the company, demanding repayment of the amount.
Both the CBI and the Serious Fraud Office came to the conclusion that the money, which came into Satyam, left the company as part of a scheme perpetrated by the former management to prevent detection of the fraud.
TOI | May 11, 2015
Contact Lawyers In India : https://lawintellectindia.com/contact-us/