New
Delhi - The founder of fraud-hit Indian information technology firm
Satyam had diverted billions of rupees from the company and inflated
the number of employees to withdraw cash, a public prosecutor said
Thursday according to news reports.

The prosecutor made the comments during a hearing of the police's
request for extension of custody of Satyam founder Ramalinga Raju and
the company's former chief financial officer Vadlamani Srinivas in a
court in the southern city of Hyderabad, PTI news agency reported.

Raju, formerly Satyam's chairman, was arrested on January 10 after he revealed an accounting fraud of 1.43 billion dollars.

Satyam is India's fourth-largest software exporter and operates in 66
countries. It said it had 53,000 employees and counts 185 Fortune 500
companies as its customers. Prosecutor Ajay Kumar told the court that
Raju had diverted 74 billion rupees (1.50 billion dollars) from his
company for personal wealth, forged bank documents to show non-existent
bank balances and purchased thousands of acres of land under false
names.

"It is a multi-dimensional case involving fudging of figures, forging,
benami (false names) land deals and transfer of shares," the
prosecutors said while seeking extension of police custody of Raju and
Srinivas.

The prosecutors said Satyam had only 40,000 employees and not around
53,000, as claimed. "Every month 200 million rupees was being withdrawn
in the name of the non-existent employees," Kumar said.

The prosecutor asked to extend custody for Raju, which was to end
Thursday, for one more day for questioning about the forged documents.

Raju's lawyers said that the accusations were false. The court extended custody for Raju and Srinivas till Friday.

Meanwhile, a new board of Satyam directors appointed by the Indian
government met in Hyderabad, where the company has its headquarters, to
discuss ways to help the firm out of the current crisis. (dpa)