Insider trading is among a whole series of possible violation of the Companies Act and other laws identified by the Registrar of Companies, sources said.
Satyam promoters and top officials may have indulged in insider trading, according to preliminary investigation into the Rs 7,800 crore fraud in the Hyderabad-based IT company, sources in the Ministry of Corporate Affairs said on Monday.
Insider trading is among a whole series of possible violation of the Companies Act and other laws identified by the Registrar of Companies, sources said, adding that initial findings are subject of a detailed investigation by the Serious Fraud Investigation Office.
According to the preliminary inquiry, there appeared falsification of books of accounts inflating the financial position falsely to the extent of over Rs 5,000-6,000 crore and disclosing false banks and cash balance in published financial statements.
Besides, it came across utilisation of capital receipt for revenue payment like dividend, managerial remuneration and other cash outflow which are usually done out of cash profits.
RoC's report said violations may have occurred under sections 372A, 205A, 297, 299, 300 and 207 of the companies law.
The report also said there may have been window-dressing of published financial statements with an intention to allure investors, resulting in false value of shares appreciating in the stock exchanges.
A day after Satyam founder Ramalinga Raju disclosed cooking the company's books, a special judge for Economic Offences in Hyderabad ordered, on January 8, seizure of the company's documents on a petition from RoC, Andhra Pradesh.
The union government also ordered a probe by the Serious Fraud Investigation Office. Today, the government expanded the scope of SFIO investigation by bringing in two other Raju family promoted companies - Maytas Properties and Maytas Infrastructure - in the purview of the probe.
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