CBI evaluation of documents, fake invoices pegs the size of fraud close to Rs 9,600 crore.
Its probe into the accounting fraud at Satyam Computer Services has given CBI enough reasons to believe that the scam involves a much bigger amount, close to Rs 10,000 crore, than what was disclosed by the IT company’s founder, Ramalinga Raju, who is now awaiting trial.
Sources said the agency has retrieved over 7,000 fake invoices and forged documents showing fixed deposits and bank balances, and their evaluation shows that the size of the scam is over Rs 9,600 crore, much more than the Rs 7,800 crore Raju disclosed on January 7.
They said the investigating agency during the probe found that the accused relied heavily on technology to generate nearly 7,000 fake invoices to the tune of Rs 4,500 crore and fed the same into Satyam’s books.
The sources said these inflated figures were also reflected in the balance sheet in the form of audit reports, which helped the company cheat the public who were purchasing its shares.
The buck did not stop here as the accused have also given fabricated statements, found by the CBI, about high capital of the company.
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The accused forged documents and created fake Fixed Deposit Receipts (FDRs) to the tune of Rs 3,300 crore. The FDRs were shown by the accused as available deposits of the company, the sources said, adding the accused had also allegedly manipulated bank guarantees to show the balance in bank accounts as Rs 1,800 crore.
The CBI alleged that the accused had forged bank documents showing the existence of the cash balance in five banks, including ICICI Bank, HSBC, Citibank and BNP Paribas, but the banks clarified that they did not have any cash balance in the name of the firm.
CBI is, at present, questioning the disgraced former chairman, B Ramalinga Raju, and others, including the auditors of Price Waterhouse. Their custody was handed over to CBI yesterday for two days.
Besides Raju, his brother Rama Raju, Satyam’s former CFO Vadlamani Srinivas and PW partners S Gopalakrishnan and Talluri Srinivas are in jail, awaiting trial in connection with the case dubbed as India’s biggest corporate fraud.
In a related development, the CBI was examining the “digital evidence” of the share transactions at the National Stock Exchange and the Bombay Stock Exchange and did not rule out the possibility of questioning some officials of the Securities and Exchange Board of India (Sebi), the capital market regulator. Sebi, too, is independently probing the fraud.
CBI was probing the rotation of funds and role of front companies used in rotation of funds, sources said, adding that it was found the accused had floated more than 320 companies and nearly 60 companies had same addresses.
Experts including chartered accountants from the Institute of Chartered Accountants of India and Institute of Cost and Works Accountants of India are also assisting CBI in probing the role of the regulator in this case, sources added.
CBI registered a case against Raju and others for their alleged involvement in what it called a unique accounting fraud at the Hyderabad-based company.
The scam has made the CBI constitute a Multi-disciplinary Investigation Team (MDIT), headed by Deputy Inspector General V V Lakshmi Narayana, which will be headquartered in Hyderabad to undertake a thorough probe.
The case was registered under 120-B (criminal conspiracy), 409 (criminal breach of trust), 420 (cheating), 467 and 468 (forgery), 471 (using forged document as genuine), 477-A (falsification of accounts).
The case was handed over to CBI on February 18 by the Centre after a request seeking that was received from the Andhra Pradesh government.
On January 7, Raju had admitted to fudging accounts and inflating profits over the past several years, following which he was arrested by the Andhra Pradesh Police on January 9.