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Satyam fraudster faces lie detector

Satyam's former chairman B. Ramalinga Raju, could face a lie detector test.

Ramalinga Raju admitted he had falsely reported the company's results in January. This left the company short of cash, its customers short of confidence and staff moral low.

According to reports in India, the Central Bureau of Investigation has requested that he and two others take a lie detector test to establish the true extent of the fraud.

The Hindustan Times reports that the Central Bureau of Investigation (CBI) also wants B. Ramalinga Raju's brother, B. Rama Raju, and former chief financial officer, Vadlamani Srinivas, to undergo the test.

"We have applied for conducting a polygraph test on the trio in a Hyderabad court as we feel more evidence is required," CBI director Aswini Kumar said.

This could put doubts on the extent of the accounting fraud Raju admitted to at the Indian IT services provider. The company is currently in the process of being sold and potential buyers will need to know Satyam's true financial position.

Robert Morgan, consultant at Hamilton Bailey, believes western firms will be put off by the fraud and its possible repercussions.

"I cannot see an IBM or any other global supplier taking it seriously. I think they would like to buy Satyam, but the possibility of action from shareholders will stop any western company buying it," said Robert Morgan.

Morgan believes Satyam will go to another Indian firm because they are more used to how Satyam is run. "The Indian companies will take it on trust because they are owned by families, rather than shareholders."


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