Fake staff help cook the books

By M.C. Govardhana Rangan | January 23, 2009, Friday |

Print Edition

SATYAM Computer Services Ltd, the software exporter at the center of India's biggest fraud inquiry, padded employee numbers to siphon off cash and forged documents to support fake bank deposits, a prosecutor said.

Satyam, India's fourth-largest software provider, had about 33 billion rupees (US$674 million) of "fictitious and non-existent" accounts, public prosecutor K. Ajay Kumar told a hearing for the company's arrested founder, Ramalinga Raju, yesterday. The Hyderabad-based company had about 40,000 employees, short of the 53,000 claimed by Satyam, he said.

India's government is building a case against Raju two weeks after his admission he had falsified earnings sparked a plunge in Satyam's stock. Government-appointed directors plan to hire a financial adviser this week to devise a rescue plan as clients cancel contracts and the company runs short of cash.

The falsified employee data was used to siphon off 200 million rupees a month, CNBC-TV18 reported.

Satyam's state-appointed board has hired KPMG and Deloitte Touche Tohmatsu to restate the accounts after Raju said he'd inflated assets by more than US$1 billion.

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Fake staff help cook the books

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