Indian police arrested the chief financial officer of outsourcing giant Satyam Computer Services on Saturday, the third executive to be charged in a massive fraud scandal that threatens to roil India’s flourishing tech industry.
The arrest of Vadlamani Srinivas came as authorities tried to contain the $1-billion US fraud scandal by dissolving the company’s board and announcing plans to name 10 new replacements.
The scandal broke Wednesday when Satyam’s founder and former chairman, B. Ramalinga Raju, confessed to filling the company’s balance sheets with “fictitious” assets and “non-existent” cash.
Raju resigned the same day, along with his brother, managing director B. Rama Raju. The siblings have been arrested and were charged Saturday with criminal conspiracy, forgery, breach of trust and falsifying documents and face up to life in prison.
Srinivas, the third-ranking executive, was charged with the same offences.
Corporate Affairs Minister Prem Chand Gupta dismissed Satyam’s board late Friday night. A judge on Saturday ordered Raju and his brother to be held in judicial custody until Jan. 23 while the investigation continues, said Raju’s lawyer, S. Bharat Kumar.
Satyam employs 53,000 people. Its clients include Fortune 500 companies, including Nestle, General Electric and Ford Motors.