Since Tech Mahindra has taken over Satyam, the ED wants to proceed against it as an accused in the case. A bench headed by Chief Justice Dipak Misra dismissed the ED’s plea and upheld the Hyderabad High Court’s 2014 judgment that ruled that Tech Mahindra cannot be fastened with criminal liability of Satyam.
The Supreme Court has rejected the Enforcement Directorate appeal seeking to make IT major Tech Mahindra liable for the alleged money laundering of over Rs 820 crore by erstwhile Satyam Computer Services. Since Tech Mahindra has taken over Satyam, the ED wants to proceed against it as an accused in the case. A bench headed by Chief Justice Dipak Misra dismissed the ED’s plea and upheld the Hyderabad High Court’s 2014 judgment that ruled that Tech Mahindra cannot be fastened with criminal liability of Satyam. The scandal broke in 2009 when founder-chairman of Satyam Computers Ramalinga Raju confessed that the company’s accounts were tampered with and disclosed a Rs 7,000-crore accounting fraud in the balance sheets. Later, Tech Mahindra took over Satyam Computer in 2013 through a government-monitored auction. The ED argued that the successor company could not escape responsibility for the acts of omission and commission of the erstwhile company. It said Rs 822 crore, the “proceeds of crime” infused into Satyam by its previous board of directors, came into the hands of Tech Mahindra, thus the latter cannot escape its predecessor’s liabilities. However, the company argued the investigating agencies cannot accuse the merged entity for offences that have been committed by Satyam.
Tech Mahindra said it may get blacklisted from international operations in the wake of the money laundering charges, and the software business of the county could also get hit since it was a leading firm. It said there was neither any allegation nor material evidence to show the firm was ever aware of the commission of scheduled offence or the fact the monies in its possession were allegedly tainted. Tech Mahindra said that this amounted to an abuse of process of law where a victim of a crime has been charged with the offence of money laundering on the misconceived basis that it was “in possession” of proceeds of crime. “It is the victim of an unprecedented fraud perpetrated by its former chairman B Ramalinga Raju and his associates,” it said. The ED, in October 2012, also froze Rs 822 crore worth of fixed deposits of the erstwhile Satyam Computer Services, stating the deposits constituted proceeds of crime derived out of scheduled offences under the Prevention of Money Laundering Act (PMLA), 2002, committed by B Ramalinga Raju and others. After the investigating authorities added money laundering charges under sections 70 (3) and (4) of the Prevention of Money Laundering Act, 2009, Tech Mahindra moved the HC seeking quashing of the charges.