The timing of the arrest of Ramalinga Raju raises more questions about his connections with the political powers-that-be in Andhra Pradesh.
The question doing the rounds is whether Satyam founder Ramalinga Raju’s arrest hours before he was to depose before a Securities and Exchange Board (SEBI) team was designed to keep him in Andhra Pradesh, without letting him get into the clutches of central authorities.
Sources say the Raju brothers have such an intricate financial relationship with powerful politicians in the state that they would do their utmost to protect him, lest the skeletons tumble out of the cupboard.
It is well known the authorities have a list of Most Favoured Contractors (MFCs) for infrastructure and construction projects. These companies get priority in allotment of these projects, and it’s an open secret that it takes a lot of political clout to get into the MFC list.
The fact that the Rajus’ Maytas firm got almost every project for which it bid clearly indicates the level of clout it commands. “Maytas does not have all the qualifications to bag big projects, but it gets into these projects through a consortium route. Other construction companies, which do not have the political clout, ensure that Maytas is with them so that they will get the projects,” a senior contractor explained.
Maytas has been given works worth Rs30,000 crore so far, including the Rs12,000-crore Hyderabad Metro Project. It is well known that every infrastructure project has a built in margin of about 14 per cent for the contractor, out of which 4 per cent goes as commission to various persons including politicians.
Sources said Raju must have lent huge sums of money to the politicians which were basically turned into bribes when major projects were allotted to Maytas. “This has sucked Raju in. He has given out money that never came back to him. It remains to be seen how much he is willing to disclose about all this now,” a source who tracks such deals said.
The murky dealings in major projects became evident in the case of Gammon, which was building a flyover at Punjagutta in Hyderabad. One of the sub-contractors was said to be a relative of a powerful politician in Andhra Pradesh. The flyover collapsed during its construction and Gammon was found to be the guilty party. The authorities enquired into the matter and Gammon was asked to pay compensation to two people who were killed in the collapse. Gammon refused to pay and the political clout of the sub-contractor managed the whole affair.
It is well-known that Raju has been nurturing a political nexus right from the time of N Chandrababu Naidu’s regime. This is said to have gone even further after 2004 when YS Rajasekhara Reddy came to power. So the big question is what Ramalinga Raju has left unsaid in his five-page letter about the unaccounted Satyam funds.
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