Satyam founder Raju, wife, kin convicted for evading income tax

A local court on Thursday convicted directors of 19 companies whose promoters included wife and sons, family members and relatives of Satyam Computer Services Ltd founder B Ramalinga Raju for allegedly evading income tax.

M Laxman, special judge for the Economic Offences Court, sentenced the men and women directors of the accused companies to one-and-a-half year simple imprisonment each, and also imposed Rs 10,000 fine on each.

However, the court, based on a plea of the accused, suspended the sentence for one month to enable them to approach a higher court.

Public prosecutor for the Income Tax Department, Ramakrishna Reddy, said they argued that the accused companies deliberately did not pay the tax though some have shown amount ranging from Rs 93 lakh to Rs 2 crore in each company as pending tax in the account books.

"They were charged under section 276 c(2) and 278(B) of Income Tax," Mr Reddy said.

"Though they had sufficient means to pay the tax, they have deliberately not paid the tax, though it was declared in their books. The court upheld our argument."

Each company has 4-5 directors comprising mostly of Mr Raju's family members and same persons were repeating as directors in all companies, he said.

Mr Raju and nine others accused, including his two brothers, are currently on bail in a case related to fudging of Satyam accounts in 2009.

Augments pertaining to the Satyam multi-crore accounting fraud case are currently being held in a local court.

Most of the tax dues pertain to the assessment year 2008-09 and range from Rs 93 lakh to Rs 2 crore, Mr Reddy said.

The 19 companies floated by Mr Raju's family members were based in Hyderabad and several of them have premises in Bachupally area for which 98 acre land was acquired, he said.

Maytas (promoted by Mr Raju's family) entered into an agreement with these companies to develop properties, which was in the ratio of 23 per cent (19 companies) and 77 per cent (Maytas), the PP explained.

"They had filed returns (declared tax) but chose not to pay the tax. Notices were issued by the I-T Department asking them to pay the dues. They did not comply and hence we approached the court," Mr Reddy added.