Citibank starts freezing Satyam’s Accounts

Our reporters have confirmed that, Citibank has frozen more than 30 trade receivable accounts of Satyam Computer Services Ltd, following erstwhile chairman B Ramalinga Raju’s startling admission of fraud as the bank aims to protect the bank’s $70-million exposure to the troubled IT major. This will directly hurt the daily operations of Satyam Computers.

Citibank has also stopped fresh disbursements to Maytas Properties and Maytas Infrastructure – the two other companies controlled by Raju and his family.

In a separate development, the RBI under Dr. Rao which is a little laid back in its actions and measures has finally asked all the banks to submit details about their exposure to the troubled IT Giant. Banks may be asked to write off the short-term loans to the company to maintain the margin amount with broking houses and custodians, to keep the shares afloat in the market, as there has been a sharp fall in the share prices.

Secondly, those who have institutional holdings in direct equity and long term loans may be asked to follow the usual debt recovery route. Banks may also ask the company to release funds from its vast expanse of real estate holdings.