Satyam fraudulent entries by Raju at Rs.6,800 crore

September 29th, 2010 - 9:33 pm ICT by IANS  

Ramalinga Raju Hyderabad, Sep 28 (IANS) The total impact of fraudulent entries by the original promoters of Satyam Computer Services on the profit and loss account was to the tune of Rs.6,800 crore, chairman of Tech Mahindra, the firm which acquired Satyam, said Wednesday.

As per re-stated accounts by Tech Mahindra, the promoters led by B. Ramalinga Raju recorded fictitious revenue by creating false invoices and circumventing the normal process by which revenue would be logged in the book of accounts.

Then non-existent cash collections were shown from customers and forged bank statements prepared to support such claims.

The fictitious revenue from April 1, 2002 to Sep 30, 2008 stood at Rs.5,352.8 crore, of which Rs.4,870 crore was translated into fictitious cash and bank balances.

Also, interest income that did not exist was recognised from these bank deposits, which aggregated to about Rs.899.8 crore, during April 1, 2002 to Sep 30, 2008.

“It was fictitious profit which was shown based on fictitious revenue which was not earned,” Tech Mahindra Chairman Vineet Nayyar said, presenting the re-stated annual results for 2008-09 and 2009-10.

“They showed fictitious tax payments, they took actual bank loans which were not recorded. We have some entries and debits which we cannot explain, which remain relatively unidentified,” said Nayyar.

The scam also involved registering a foreign exchange gain to validate payments from customers. These were about Rs.206 crore. During the period, the promoters also took bank loans worth Rs.720 crore, which were again not recorded.

“So this was the situation. You had a hugely negative EBIDTA, negative networth and you had loans on top,” Said Nayyar.

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