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By | John Oates 3rd February 2009 13:03

India could change takeover law to save Satyam

As founder faces further inquisition

Regulators from the Securities and Exchange Board of India (Sebi) have won the right to question the Raju brothers and other Satyam staff.

Ramalinga Raju and his brother Rama and the firm's CFO are all still in custody. Ramalinga wrote an explosive letter admitting a $1bn fraud, although he insisted he did not benefit personally from the deception.

Sebi went to court yesterday to get access to the accused. Investigators now have three days to question the men.

Although the scandal is also being investigated by local police and the Indian Serious Fraud Office some are calling for a larger, wider probe because of suspicions that politicians are linked to the fraud.

Sebi also agreed on Monday to change the rules on how prices are set for acquisitions and takeovers - the regulator made the change at the request of Satyam. This could make it easier for building and engineering group Larsen and Toubro to take control of the firm - L&T currently owns 15 per cent of the outsourcer.

Meanwhile Satyam insists it is business as usual. The outsourcers told the Business Standard it has signed up 15 new contracts and seen only one customer - State Farm Insurance - cancelled a deal. ®

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