Key players in the gargantuan effort to restate the company’s fraud-ridden accounts recall those days and nights in the trenches
The team could be forgiven that moment of self-congratulation. They had spent many a sleepless — and often hungry — night to ensure that the Satyam accounts were released on schedule. In a way, these were the people that finally exorcised the ghost of scandal that had haunted Satyam ever since founder B Ramalinga Raju admitted to a multi-crore fraud in early January, 2009.
“Throughout the day of September 29, my heart was beating like a sledgehammer. The pressure was felt by everybody. We were fighting a battle, racing against the clock, trying to get everything done within the stipulated time. The day of reckoning had finally arrived,” says S Durgashankar, CFO of Mahindra Satyam.
The account restatement process had been a gargantuan 18-month effort. Besides the 200 from Satyam’s finance, internal audit and IT departments were around 100 forensic investigators and another 100 members of the statutory audit team. It involved collecting 30 terabytes of information (if printed, it would fill 270,000 cupboards), checking over 2 million emails, securing and mining information from over 300 computer hard disks and verifying over 200 bank accounts. “The whole process was not just an intellectual challenge, but a test of physical endurance as well,” recalls Durgashankar.
Venkatakumar Raju (fondly called VVK by teammates), senior vice-president-finance, who is known for his inimitable ‘hands-on’ leadership style, put in a daily average of 15 hours consistently for months together, battling one emergency after another. “VVK carried three back-up batteries for his cellphone and hired two drivers round the clock,” says a source.
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Just putting in long hours was not enough. The team had to find innovative solutions and workarounds to many problems. Known for his subtle sense of humour and quick thinking, Rama Rao Ramella, assistant vice-president-finance, led the shop-floor coordination effort. The challenge was not just completing the task on time, but to also ensure day-to-day operations were not affected.
Ratnam Kasarbada, head of global payroll, typified this effort. He not only delivered successfully on all payroll-related audit and restatement efforts, but also ensured uninterrupted payroll cycles for Mahindra Satyam during the entire 18 months. “He also switched hats and became our resident systems expert many a time to find solutions to technical glitches,” said a source.
After Tech Mahindra took over the sinking ship Satyam in April 2009, the problems before the new management were manifold. It had to not only keep the show going by keeping employee morale intact, but also ensure a steady inflow of cash for day-to-day operations, including salaries.
At the same time, a slew of investigating agencies had descended on the campus and was on the prowl for every financial transaction by the company’s erstwhile management. They included the criminal investigation department of the Crime Branch, the CBI, the Serious Fraud Investigation Office, the Sebi, the income-tax department, the Registrar of Companies and even the Securities & Exchange Commission of the US.
“The entire process was like refuelling an aircraft in flight. The job was further complicated by the fact that we had new people heading various areas of finance and accounts because several key people had been taken into custody by investigative agencies, leaving a sudden vacuum,” says Durgashankar, who himself was new at Mahindra Satyam, having joined only in June 2009 from the Mahindra Group where he was senior vice-president for M&As.
Durgashankar says the job was completed in time thanks to teamwork. Not just on the part of the company’s finance department, but that of various other departments like internal audit and IT, consultants like KPMG, various international and domestic legal advisors, and its statutory auditor. “The biggest credit goes to the Indian government, which swung into action immediately after the fraud came to light and asked people of eminence to revamp the company,” he adds.
The accounts rectification process involved identifying and fixing over 200,000 line adjustments covering over 300 types of accounts. Besides, over 7,000 contracts and 6,000 bank reconciliations were reviewed. The investigations not only identified the fraudulent transactions, but also unearthed how the fraud was perpetrated.
Despite the cumulative 100 man years of effort that has gone into the exercise already, Mahindra Satyam believes given the magnitude and complexity of the issues, it could take at least another 18 months to fix all the problems. So, for the band of bottomline brothers there is a fresh deadline looming: to publish financials for Q1 and Q2 of the current fiscal by November 15. That can only mean burning the midnight oil is far from over.