Rediff India Abroad
 Rediff India Abroad Home  |  All the sections


The Web

India Abroad

Sign up today!

Get news updates:

Home > India > Business > PTI > Report

   Discuss   |      Email   |      Print   |   Get latest news on your desktop

Did Satyam funds evaporate after September 2008?

January 25, 2009 22:00 IST

Satyam [Get Quote] may have been loaded with funds of over Rs 5,000 crore as on September 2008, but it could have been left with just Rs 200 crore of maturable fixed deposits by the time IT firm's founder Ramalinga Raju revealed financial fraud on January 7.

As per the last auditing done by Price WaterHouse for the quarter ending September 2008, the scam-tainted firm had short -term or long-term fixed deposits of over Rs 3,300 crore, and another Rs 300 crore of accrued interest, in addition to current account deposits of over Rs 1,800 crore.

The company is believed not to have made any term deposit after mid-February 2007, though it did make a few short-term or margin money deposits, amounting to about Rs 10 crore tillSeptember 2008. The auditing was done on the basis of statements sent by a host of banks detailing the fixed long-term deposits, along with maturity, ranging between October 2008 and February 2009.

With such a cash and deposits position, the IT company should not have had any worry on the cash front and a concern to mobilise resources for the payment of salaries to its staff. In his statement on January 7, Raju had said that he was disclosing the manipulation of accounts after failing in his last-ditch effort to salvage Satyam through acquisition of the two Maytas firms on December 16. However, the bank statements, on which PWC relied for the auditing, reveal that more than 90 per cent of the total deposits had matured by January 7

PWC, whose two top officials were arrested by Andhra Pradesh Police yesterday, is understood to have prepared its defence on the basis of these documents, besides foreign exchange earnings and receivables of Satyam, as per the export clearance documents of Software Technology Parks of India.

According to the available information pertaining to deposits of the company, Satyam had a total long-term deposits of over Rs 3,300 crore for maturity during the October- February period, while its short-term deposits to mature till October 2011 were about Rs 10 crore.

According to the statements, deposits were largely held with HDFC Bank [Get Quote], HSBC, ICICI Bank [Get Quote], BNP Paribas and Citi Bank, while the current accounts were mostly with Bank of Baroda [Get Quote]. PwC official are understood to have given these documents to probing agencies to make clear their role while maintaining that it had gone by the book for the purpose of auditing.

While no comments could be obtained from PwC on the details of the bank deposits and cash position with the company, sources in the know said that it would be impossible to forge all the bank statements that were addressed to the auditor but procured by the Satyam management for auditing.

After arrest of its two partners yesterday, auditing firm said it has fully cooperated over the last fortnight in all inquiries and "has provided all the documents called for by the Indian authorities" and promised continued cooperation. "We greatly regret that two Price Waterhouse partners have been detained today for further questioning. We do not know the basis for them being detained," said a statement from Price Waterhouse, the statutory auditors of Satyam Computer.
The Andhra Pradesh CID police yesterday arrested PW's Chief Relationship Partner S Gopalakrishnan and Engagement Leader Srinivas Taluri as part of ongoing investigations into the accounting fraud disclosed by Satyam's founder Ramalinga Raju on January 7.

© Copyright 2008 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.

   Email   |      Print   |   Get latest news on your desktop