AP HC stsys ED order attaching Rs 822 cr deposits of Mahindra Satyam

Written by Agencies | Hyderabad | Updated: Dec 13 2012, 02:29am hrs
Mahindra Satyam
The Andhra Pradesh High Court today stayed a provisional order of Enforcement Directorate attaching Rs 822 crore deposits belonging to Mahindra Satyam in an alleged money laundering case involving former Satyam Chairman B.Ramalinga Raju and others.

Based on a petition filed by Msat, Justice P.V. Sanjay Kumar also stayed the notice issued by the adjudicating authority to Mahindra Satyam (earlier Satyam Computer Services Ltd), asking company officials to appear before it with regard to the case.

The ED had on October 18 issued a provisional attachment order of the companys fixed deposits of Rs 822 crore in the case related to the previous management.

The Adjudicating Authority under Prevention of Money Laundering Act (PMLA) has also issued notices to Satyam Computer Services Limited to appear before it in connection with the case.

Vivek Reddy, counsel for Msat, said the court has admitted the writ petition filed by Satyam questioning the jurisdiction of the provisional attachment order.

The court observed that the company was revived by the Government and invoking money laundering proceedings against the same company would be counterproductive to the efforts undertaken by another government agency.

The ED had attached the accounts of SCSL, saying its probe found that Raju and his associates "wrongfully" offloaded inflated shares of the said company by way of sale or pledging of shares.

The ED had said Raju and his family members allegedly "lured" investors into buying these shares by publishing "false" information about the financial credentials of the scam-hit company.

MSat in its petition said that the attachment order is in violation of the orders of CLB which directed infusion of fresh capital to revive and rehabilitate the fraud-hit company.

The fixed deposits, which have been attached by the ED, are the result of the funds infusion made by the new promoter.

The attachment order defeats the process of the revival of the Company which was the objective of the CLB order and steps taken by the Government of India, Ministry of Corporate Affairs, the IT major said.