Ramalinga Raju and his family members wrongfully made gains of Rs 2,743 crore, said the CBI in its finding on one of India’s largest corporate fraud.
The CBI in one of its presentation to the media also stated that Satyam Computer Services had inflated its cash balance to Rs 5,040 crore. CBI officials also said that it had understated liability of Rs 1,230 crore and over stated debt by Rs 490 crore. The company now rebranded as Mahindra Satyam was acquired by Tech Mahindra--IT arm of Mahindra and Mahindra--last year.
It further said that that Satyam had understated liability of Rs 1,230 crore and over stated debt by Rs 490 crore.
CBI findings also revealed that the promoters who held 2.18 per cent of total shares as on December, 2008, was considerably lower than 18.78 per cent in 1991. The promoters made a total of Rs 767.73 crore through shares sold through various benami transactions and brokers.
The promoters acquired a total of 935 properties having a area of 5757.30 acres of Rs 3,454.9 crore. The promoters acquired these properties during the time frame from 1999 to 2008.
Under Ramalinga Raju, Satyam floated 327 companies and published inflated financials. These front companies purchased 6,000 acres of land. Satyam had taken a loan of Rs 1,230 crore loan from the front companies which are not even accounted in books.
Under the fictitious sales segment, CBI found out that from the period of March 2003 to December 2008 about 7,561 invoices were found fake. All these fake invoices were directly inserted in the systems through Excel Porting (this was provided for bypassing the regular flow of invoices generation for emergency cases. However, this was misused).
The investigation also revealed that Satyam had executed projects in the name of seven non-existent companies that included Mobitel, Cellnet, E Care, Synony, Northsea, Autotech and Hargreaves.
On corporate governance, CBI found out that the directors received handsome remunerations, stock options at Rs 2 against the market price of Rs 500. The directors acted as mere rubber stamps, besides the promoters were always present to influence the decision.
Moreover, the promoters received dividend of Rs 27.08 crore for the year 2007-08 and 2008-09 where the actual profit after adjustment of fake revenues was Rs 176.12 crore and Rs 269.16 crore in 2008-09. They were not eligible to get dividends as per the company law section 205, said the CBI.
