Disgraced Satyam Computer Services founder B. Ramalinga Raju and former chief financial officer Vadlamani Srinivas will remain in police custody till Friday evening, a court ruled Thursday, as prosecutors said Raju had diverted Rs.74 billion (Rs.7,400 crore/$1.48 billion) from his company for personal wealth.
The crime investigation department (CID) of Andhra Pradesh police sought from the court two days' extension of custody of Raju and Srinivas, which ended Thursday.
But the court agreed to one-day extension - from 4 p.m. Thursday to 4 p.m. Friday - after hearing arguments of the public prosecutors and lawyers for Raju and Srinivas.
Earlier in the day, Ramalinga Raju's brother Rama Raju, the third accused, was taken to Chanchalguda central jail as the CID did not seek extension of his custody. Ramalinga Raju and Srinivas remained in court for nearly six hours and were taken back to the CID office after the magistrate's order.
The bail plea of the three defendants will be heard Friday.
The court is also likely to pronounce Friday its ruling on the petition of market regulator Securities and Exchange Board of India (SEBI) to record statements of the Raju brothers.
All the three accused, whose judicial custody ends Friday, would be presented before D. Ramakrishna, sixth additional chief metropolitan magistrate, who is also likely to give his ruling on the plea for special status to the accused in jail.
During the hearing, public prosecutors said Raju diverted Rs.74 billion from the company for personal wealth, forged HDFC Bank documents to show non-existent bank balance of Rs.33 billion (Rs.3,300 crore/$660 million), and purchased thousands of acres of land under fictitious names.
"It is a multi-dimensional case involving fudging of figures, forging, benami land deals and transfer of shares," prosector Ajay Kumar told the court.
He said Satyam had only 40,000 employees and not around 53,000 as claimed by Ramalinga Raju. "Every month Rs.200 million (Rs.20 crore) was being withdrawn in the name of non-existent employees," Kumar said.
"We want to find out in whose names the funds were diverted and where the entire money has gone and this is not possible without their interrogation."
The banks with which Raju had dealings have sought one day more to verify Satyam documents to see which are forged.
"There are several glaring instances of forgery. A letter supposed to be from HDFC Bank is forged. This has been confirmed by HDFC Bank to CID," the prosecutor said.
"Investigation has revealed that money has been used to buy land in Hyderabad and other places. About 400 (land) transactions have been found. Thousands of acres of land have been bought in these benami transactions," the prosecutor said.
"The entire world is watching us. The image of the country is at stake because of this multi-dimensional case involving fictitious bank deposits, fudging of figures, benami land deals and transfer of shares," the prosecutor submitted to the court.
He said Ramalinga Raju transferred shares in the names of his brother B. Suryanarayana Raju and their mother Appala Narsamma.
Opposing the extension of police custody, Raju's counsel S. Bharat Kumar told the court that CID had deployed hidden cameras and used closed-circuit television during interrogation.
He said the police have seized all documents and interrogated the two for four days, and that there was no ground for extending the period of police custody.
Talking to newsmen later, Bharat Kumar said none of the accused confessed to the CID that they had diverted Satyam money, or resorted to forgery and benami land transactions.
"Whatever the CID public prosecutor said in the court was not supported by any evidence. Even the CID petition before the court does not talk of any such confession," he said.