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Skeletons stumbling out of Satyam cupboard news
19 January 2009

As the Satyam story unravels, the details get murkier. Raju's claims that he has inflated the profits and pumped in cash himself to keep the company afloat is belied by a maze of benami accounts and siphoned funds.

Agencies investigating the company scam point to about 300 companies with links to Raju and members of his family, were used to "siphon" as much as $1 billion in cash from Satyam.

In 2002, the income tax department had investigated several Satyam offices and had found that Ramalinga Raju had opened multiple benami accounts through relative and friends. These accounts are said to hold about Rs30 crore.

Satyam along with its sister concerns Maytas Infrastructure and Maytas Properties have huge land holding. Land deals in India have traditionally been a means to launder money and often property values are under or over stated to misrepresent the funds involved.

Meanwhile the founder of the company Ramalingam Raju and his brother Ramu have been shifted to police custody, a harsher environment than the judicial custody they were in. The bail plea which was to be held today has been differed to 22 January 2008 (See: Satyam promoters, CFO remanded to CID custody till 22 January)

The new government-appointed Satyam board has appointed KPMG and Deliotte to restate its accounts as PricewaterhouseCoopers, the original auditors, had issued a statement questioningthe veracity of the financial statements presented by its staff (See: PwC will not stand by its audited accounts on Satyam).

The new auditors are expected to present new statements within three weeks.
Reports also say that Satyam's fixed deposit receipts with ICICI may have been fudged. All banks dealing with Satyam have now been asked to check transactions with Satyam to ensure that the books are in order (See: RBI asks banks to give details of their exposure to Satyam)

Satyam board struggles to find its feet
Meanwhile, the new Satyam board is looking to appoint up to three investment banks to explore the possibility of finding a buyer for the fraud-hit IT firm.

The new board of Satyam met on Saturday with a quorum of six members and also confirmed that the search for the CEO and CFO continues and that till such time these appointments are concluded, it will continue to meet on a weekly basis, to address ongoing issues.

Addressing the issue of liquidity, the board confirmed that it is engaged in discussions with banks and financial institutions. The last week had seen definite improvements on 'collections' and this is expected to be a major priority for the business leaders and the board, in the ensuing weeks. All efforts are being made to ensure that the associates (employees) are paid their salaries on time. Scheduling of Vendor payments was also discussed.

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Skeletons stumbling out of Satyam cupboard