Skeletons stumbling out of Satyam cupboard

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).