HC sets aside ED order attaching Tech-Mahindra's Rs 822 Crore Fixed Deposits

January 1, 2018:

On Monday, Hyderabad HC proceeded to set aside an Enforcement Directorate's order provisionally attaching Rs 822 crore worth of fixed deposits belonging to the Satyam Computer Services Ltd, which was acquired by Tech Mahindra.

In 2012, Enforcement Directorate (ED) had issued a provisional attachment orders freezing fixed deposits of Satyam (now merged into Tech Mahindra) in connection with its probe in the money laundering case.

ED had provisionally attached the amount alleging that it was ill-gotten proceeds of Satyam Computers.

HC Bench comprising of Justice V Ramasubramanian and Justice J Uma Devi proceeded to set aside the ED's orders.

Vivek Reddy, Counsel for Tech Mahindra, told PTI that they argued that there was no money when Tech Mahindra took over fraud-hit Satyam Computer Services Ltd (SCCL) in 2009 and on the other hand, the Mahindra group company had to infuse money to revive the B Ramalinga Raju-founded company.

"Our argument was that there was no proceeds of money when Tech Mahindra (TechM) took over the company (SCSL).

There was no money in the company then and they (TechM) had to infuse money into the company.

He added that,"So where is the question of any ill-gotten money when the company had negative balance?".

P V P Suresh Kumar, representing the ED stated that Agency might approach the Supreme Court challenging the high court's order.

"One of the strongest grounds (for an appeal in the apex court) was that the CBI special court had earlier convicted Ramalinga Raju and brothers.

A trail of loans derived from front companies revealed that Rs 822 crore out of Rs 2,171.45 crore found their way to Satyam Computers and were used for day-to-day expenses like payment of salaries among others, the ED had said in its order.

Source PTI