It is learnt that Raju, who was grilled on Wednesday for the fourth day by Criminal Investigation Department (CID) officials, reportedly confessed of using the Satyam funds to buy prime land in and around Hyderabad.

CID sources said Raju told interrogators funds were diverted during the past four to five years. The police sources said Raju was cooperative during the interrogation and the questioning has yielded these crucial facts.

He accepted that he had cooked the accounts books for over several years resulting in inflated (non-existent) cash and bank balance. He reiterated this during CID interrogation soon after his arrest on January 9. But investigations have now revealed that a big chunk of this money existed but was diverted to other firms.

There are reports that Raju swindled money through 6,000 fake salary accounts for last few years. Sources said he had created these accounts in four banks to divert the funds from fixed deposits. Some of these funds were flowed through his accounts in foreign banks. With Raju confessing to diversion of funds, the Serious Fraud Investigation Office (SFIO) and Registrar of Companies (RoC) are now trying to trace a Mauritius-based company used for channelising the money to Maytas, according to local reports. Meanwhile, the Andhra Pradesh CID has sought extension of custody of B Ramalinga Raju, his brother B Rama Raju and the firm’s ex-CFO V Srinivas by three days. The petition to this effect was filed in the court of sixth additional chief metropolitan magistrate and would come up for hearing on Thursday, prosecution lawyer Gangaraj Prasad. The court had granted police custody of the trio from January 18 to January 22. The extension of custody is necessary as the interrogation requires more time, Prasad said.

Meanwhile, Emergency Management and Research Institute held a board meeting, attended by Carnegie Mellon University professor Raj Reddy, Lok Satta national convenor Jayaprakash Narayan, Indo American Cancer Institute secretary K Krishnam Raju and EMRI CEO Venkat Changavalli.

Rajat Gupta—Chairman ISB Board joined the meeting over telephone as he was abroad. The meeting was chaired by professor Raj Reddy.

The board unanimously acknowledged the initiative of the Raju family. However, in view of the current circumstances and in the interest of the future operations of EMRI, they regretfully requested members of the Raju family to delink themselves from EMRI. The board accordingly suggested amendments of Articles of Association of EMRI to ensure that the governing board is appointed by an independent group of eminent citizens and there is a self-regulating, sustainable, accountable mechanism of governance.