Satyam's latest updates - May Axe 10,000 Employees: Headhunters

[nithyasubramanian]

MMTC backs out from Maytas project

MUMBAI: State-owned trading company MMTC Ltd has rolled back its decision to invest in a special purpose vehicle created by the Maytas group that is owned by the sons of disgraced Satyam promoter B Ramalinga Raju, the company said Friday.
The special purpose vehicle was to be used for setting up a multi-services special economic zone (SEZ).

"In view of the recent developments related to Satyam, who is the promoter of Maytas group, the board of directors have reconsidered our investment proposal and have decided to withdraw from the special economic zone," MMTC, formerly known as Minerals and Metals Trading Corp, said in a regulatory statement.

The MMTC board had approved an investment of Rs.858.5 million last September for acquiring five percent stake in the proposed special purpose vehicle.

courtesy : Express Buzz.

[sajiv]

The worst is over, feel Satyam employees

CHENNAI: Satyam employees in the city are slowly coming to terms with the initial shock they received on learning that founder B Ramalinga Raju doctored the company's balance sheet. They now feel that that the company can be revived even without the Centre's bailout package.

Earlier the employees were clueless about the financial mess in the company until it surfaced in the media. But now, the management of Satyam, which has 15,000 employees in Chennai, is holding regular interactions with them to address their concerns.

In the 'doubt clearing sessions', the employees are also briefed on the latest developments and given updates relating to the scam.

As Satish (name changed) says: "Initially all of us were shattered. But now we have accepted the situation and are prepared to take it in our stride. In fact, such things do happen at various organisations.

I don't think there is any point in pressing the panic button." He agrees that the 'doubt clearing sessions' helped them all.

Initially, nobody understood what was going on.

Satish and his friends did sense that something was wrong as many top executives had put in their papers. Their doubts were confirmed after the sensational confession of Ramalinga Raju.

"One person's fraud doesn't make Satyam invisible. Satyam was not built by just one person; it includes individuals, our clients, customers and employees," says Jose Elanjical, who is with the Global Marketing and Communication section of the company. He blames the media for creating negative vibes about the company.

When asked about a possible bailout by the government, the employees felt it was not needed.

"The quick involvement of the government itself shows that there is going to be a revival. Today we have the best people on our board," says Jose.

The employees this reporter to expect most staffers to stick on to the company, as "there is a lot of unity and synergy within the team." They too have no plans of calling it quits.

[nithyasubramanian]

Pact with Maytas on metro project may be scrapped

Tender for Krishna delta modernisation project put off

Government believes scrapping project could be the 'safest' option for it

11 crore received from consortium may not be returned if deal is scrapped

HYDERABAD: The Andhra Pradesh government dropped hints here on Thursday that it may dump the consortium led by Maytas Infra Limited to implement the Hyderabad Metro Rail Project.

Highly-placed sources in the government said that "we may have to search for a new party (consortium) to execute the 71.16-km project" estimated to cost over Rs. 12,000 crore.

Tender put off
In a related development, the government also indefinitely postponed the tendering of another massive Rs. 4,573-crore irrigation project taken up to modernise the Krishna delta system since Maytas Infra was a key tenderer.

The government is veering round to the view that scrapping of the metro rail project agreement with the present consortium is the "safest way to escape from the possible risks from Maytas Infra as the Satyam fraud has cast a shadow on its future."

The government first contemplated a move to remove Maytas from the consortium as lead player and entrust it to any one of the three other firms in the consortium (Navabharat Ventures, Ital Thai and IL & FS) but gave up this idea as Maytas and others in the consortium "may not accept this adjustment." Besides, any disturbance to the originally assigned roles under the agreement may pose legal problems, the sources said. If the agreement is terminated, the government is not likely to return the Rs 11 crore it received from the consortium towards Rs 30,311 crore as royalty for the contracted 35-year period, the source added. Also, it will take back the 269 acres that it had given to the consortium for commercial use, apart from raising railway stations.

No decision on port

As of now, no decision, however, has been taken on the Rs 1,590-crore Machilipatnam deep water port project which has been awarded to a different consortia led by Maytas.

[nithyasubramanian]

Raju spends time with books

HYDERABAD: The disgraced former Chairman of Satyam Computer Services, B. Ramalinga Raju, is leading a secluded life at Chanchalguda Jail ever since he was remanded to judicial custody. Mr. Raju is not mingling with anyone and is spending time by himself in the jail.

Fellow prisoners are also not taking any initiative to strike a conversation with him after seeing his photographs in newspapers. Company CFO Vadlamani Srinivas was also lodged in the same lockup. Mr. Raju is spending most of the time by reading books related to business and spirituality, apart from newspapers . Raju, his brother Rama Raju and Srinivas are staying in the lockup with two petty offenders from Thursday.New blankets were also provided to them."He appears to be depressed," officials said. Ramalinga Raju's son Teja Raju and advocate S. Bharat Kumar are regularly meeting him and updating him about the status of the petition for bail. His son brought fruits and four pairs of clothes. Officials explained that a visitor could interact with inmates from behind grills during 'mulakhat' as per jail norms. Relatives could also give clothes and books to remand prisoners.

courtesy : The Hindu.

[nithyasubramanian]

Satyam founder Raju seeks special status in jail

Hyderabad, Jan 16 (IANS) Lawyers for disgraced Satyam Computer Services founder-chairman B. Ramalinga Raju Friday sought special status for him in jail, saying he has stature in society and is used to a certain lifestyle.

The plea for special status was made during a court hearing on bail application by Raju, who was arrested and lodged in Chanchalaguda jail here after he confessed to committing an accounting fraud of Rs.70 billion (Rs.7,000 crore/$1.43 billion) in the company he founded in 1987.

However, counsel for prosecutors opposed any special treatment for Raju, contending that he has committed a crime and should be treated as a criminal.

The court has reserved ruling on the matter.

courtesy : AOL.in

[nithyasubramanian]

Satyam fraud makes Nasscom tell IT firms 'be transparent'

Bangalore, Jan 16 (IANS) The massive financial fraud by IT bellwether Satyam Computer Services has goaded the software industry's representative body into issuing a wake-up call to its members across India and abroad.

In a directive to its 1,200-odd members, the executive council of National Association of Software and Services Companies (Nasscom) asked them, especially those listed and accountable to investors, to be transparent and disclose much more than they have.

'The executive council met within days after the Satyam fraud came to light and decided to be proactive with respect to transparency and disclosures. We have sent out a message to all our members to disclose maximum. Even a trivial matter should be disclosed,' Nasscom chairman Ganesh Natarajan told IANS in an interview here.

To ensure 'a one-off case' like Satyam did not tarnish the Indian IT industry's image, Natarajan said if the Hyderabad-based global software major collapsed, it would result in undoing what Nasscom had been building over the last 20 years.

'So we have assured our members that we are working with the government and other agencies (regulators) to ensure business continuity and the need to restore faith of all stakeholders, including investors,' he said.

Natarajan, who is also chief executive of global software solutions provider Zensar Technologies, said Nasscom was trying to ensure Styam did not collapse.

'We are doing whatever we can to see Satyam is able to retain its employees, customers and suppliers as it is our fourth largest software exporter and has marquee clients from the world over, including Fortune 500 firms.'

Natarajan said the government's intervention and the speed with which the new Satyam board had acted to save the beleaguered firm, had sent the right signals to customers and other stakeholders that India would continue to be a talented and cost-effective destination for outsourcing software services.

'Satyam fraud is an extreme case in extreme situations. Such an incident has never happened in the past, it is unprecedented. It is a much larger issue. It is not merely about IT industry but about corporate governance.'

Nasscom has also been in touch with its counterparts in the US and Europe to address their concerns over the integrity of the Indian IT industry, he said.

'We are also talking to analysts about what we are doing to bring stability to the organisation (Satyam), to allow business continuity and to get to the root-cause of the problem, which is larger than the accounting fraud itself,' Natarajan observed.

'We have not seen the reality yet. I don't have answers for what, why and how it happened. Investigations are on,' he added.

'We should not only consider this unfortunate case as a wake-up call, but also an opportunity to learn a lesson from it. If boom times of the last four-five years made us complacent about compliance, it is time to clean up and enforce best practices such as transparency, accountability and ethical way of doing business,' Natarajan asserted.

courtesy : Yahoo News.

[nithyasubramanian]

Satyam saga shakes corporate India, but hopes alive

Various of India,January 16 (ANI):The surfacing up of fraud in India's fourth-largest software services exporter,Satyam Computer Services has put into focus corporate governance in India and in its aftermath the Indian economy has a task to retain the foreign investors.Analysts say the saga exposes serious shortfalls in corporate India that must be addressed to ensure its credibility in an increasingly globalized and competitive world.

courtesy : Yahoo News

[nithyasubramanian]

Director says Satyam viable, no govt bailout plan - report

Fraud-scarred Satyam Computer Services is a financially viable company and there is no plan for a government bailout, the Times of India newspaper said on Thursday, quoting a newly appointed director.

"Taking money from the government will send a wrong signal," Kiran Karnik told the paper, amid speculation that the state will have to step in to rescue the firm.

The Times of India said raising funds from equity partners and banks was the top priority of the new board to meet working capital and to pay salaries to staff.

Karnik is one of three board members appointed by the government on Sunday after Satyam's chairman last week revealed India's biggest ever corporate scandal, threatening the firm's survival.

Satyam has a 53,000-strong workforce and counts Nestle and General Electric among its clients.

Karnik, a former head of lobby group National Association of Software and Services Companies, told the Times of India the company was a "very viable organisation" and would make a profit in a few months.

"Our only concern is to keep the show and hold on to the clients and the workers," he said.

Satyam appointed two new audit firms on Wednesday to examine the extent of the fraud, determine how much cash it has on hand and restate its results.

Local media have estimated the government would have to pump up to 20 billion rupees ($410 million) into the company to keep it afloat and reassure its nervous clients and employees.

The prime minister met key ministers on Tuesday to discuss Satyam, and corporate affairs minister PC Gupta later said "different possibilities" were being examined.

The three-member board was working towards making Satyam financially viable before considering any sale or merger, the paper said.

Satyam's founder and chairman Ramalinga Raju quit last week after confessing the company's profits had been falsely inflated for years.

Raju, 54, his brother and the company's former chief financial officer have been charged and are in jail in the southern Indian city of Hyderabad, where Satyam's headquarters is located.

The scandal has hit stocks and the currency, as investors worried over the damage to foreign investment in Asia's third-largest economy and the once-booming outsourcing sector.

Satyam's stock market value has dived to less than $450 million from more than $7 billion six months ago.

courtesy : Yahoo News.

[nithyasubramanian]

Satyam board to safeguard employee, client interests: Director

New Delhi, Jan 16 (IANS) The newly-appointed member of the Satyam board of directors, Confederation of Indian Industry (CII) chief mentor Tarun Das, Friday said the main priority was to safeguard the interests of employees, customers and investors of the scam-tainted IT company.

Minister for Corporate Affairs P.C. Gupta Thursday named three more directors to the Satyam Computer Services board. Besides Das, the other two directors named were T.N. Manoharan, noted chartered accountant, and Suryakant Balakrishnan, nominee of the Life Insurance Corp.

Satyam's disgraced founder B. Ramalinga Raju last week admitted to a Rs.70-billion ($1.43 billion) accounting fraud.

In a statement, Das said he had accepted the government's request to serve on the government-nominated Satyam board 'in a spirit of public service, to work in partnership with my fellow members of the board'.

'Our collective endeavour is to help find solutions to extremely difficult challenges facing the company and the priority is, as other board members have said, to safeguard the interests of employees, customers and investors,' he added.

On Thursday night, CII also praised the 'quick action' of the corporate affairs minister on the Satyam matter.

CII director general Chandrajit Banerjee said that the new board had some of the 'best corporate minds of the country and between them, collectively, have the necessary experience to turn around Satyam'.

CII said that with the appointment of auditors KPMG and Delloite, it is certain that the authentic record of accounts will be available soon. 'This would go a long way in the process of reviving Satyam,' it added.

The government earlier nominated three members to Satyam's board. They are Deepak Parekh, chairman of Housing Development Finance Corp, Kiran Karnik, former president of the National Association of Software and Service Companies, and C. Achuthan, former member of the Securities and Exchange Board of India.

courtesy : Yahoo News.

[Kalyan]

Banks free to sell Satyam assets

The government has assured state-run banks that it will not come in their way of invoking guarantees and taking over pledged Raju properties if subsidiaries of Satyam fail to service loans.

"Public sector banks (PSBs) have lent Rs 2,000 crore to Satyam subsidiaries. In addition, they have given bank guarantees to the tune of Rs 1,300 crore. The loans are fully secured and the banks are in possession of securities worth Rs 2,700 crore," a finance ministry official, who asked not to be named, told ET on Friday.

Any assurance from the ministry assumes significance since the Satyam scam is snowballing into a political tug-of-war.

Secured loans are given against collateral and if the company goes bankrupt, the lenders are entitled to the proceeds of liquidated assets unlike in the case of unsecured loans which come at a higher rate of interest.

The official also clarified that the government will not ask PSBs to stop funding infrastructure projects being executed by companies associated with Satyam, as they are separate legal entities with separate balance sheets.


Currently, the ministry of corporate affairs is looking into the books of eight Satyam companies. The ministry had ordered a probe into eight companies of Satyam and their promoters, including Maytas Infrastructure and Maytas Properties, as part of its larger investigation into Satyam's fabricated accounts.

The official said that the government was not looking at any moratorium on banks — government-owned or private — taking steps to attach the assets of Satyam for defaulting on payment.

"Banks are entitled to take possession of the assets of defaulting companies under the law. However, they may not be keen to classify a loan as a non-performing asset and take possession. They might, instead, prefer to restructure the loans. As far as the government is concerned, we are not looking at preventing banks from invoking their right to possess assets of defaulting companies guaranteed by the law," said the official.

Under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act, lenders are entitled to take possession of the assets of the defaulter without going to court if the borrower does not pay back within two months of receiving a notice. Although Satyam's board member and HDFC chairman Deepak Parekh had said the company has Rs 1,700 crore receivables, banks would expect auditors to certify that, said the official.

courtesy : economic times

[Kalyan]

Satyam staff faces cut in variable pay

Employees at the troubled Satyam Computer Services who may have heaved a collective sigh of relief with the anticipated receivables
position of Rs 1,700 crore, could be in for a cut in their variable pay packages. Till last week, there were huge uncertainties regarding payment of their salaries itself.

Satyam needs Rs 800 crore in January for payment of wages and debt obligations while the requirement is Rs 600 crore each for February and March. The company said it had paid $20 million towards January salaries (paid every fortnight) to its US employees. In all, the company needs up to Rs 1,500 crore till March to service wage bill and debt.

When asked about a possible dip in variable payouts, a Satyam spokesperson declined to comment.

The remuneration package for the 53,000 employees comprises of a variable and a fixed component. The variable component is 10% at the entry level, 20% at the middle level and 30% at the senior management level. Half of the variable pay is a guaranteed payment. The other half is linked to three parameters including the performance of the company, the individual and the business unit.

The proposal to cut variable pay was, in fact, on the cards even at the end of the second quarter when the company scaled down its hiring projections given the weakening demand for software services. The company had earlier talked about trimming its costs by re-assessing the variable payouts.

In fact, Satyam Computer had said it would review the guaranteed component of the variable pay given to its employees . Any cut could mean a lower take home pay for the employee. Currently, the company's wage bill accounts for over 60% of its revenue.

courtesy : economic times

[Kalyan]

I-T probe likely to cover Satyam bankers too

The Income-Tax department, which is investigating into Satyam Computer's tax payments and returns, may expand its probe to cover
banks which held deposits of the company, a finance ministry official said. The probe would look at the TDS (tax deducted at source) certificates submitted by the company in the past six years along with its tax returns and payment of the tax deducted by banks on interest that was paid on company's bank deposits.

The I-T office in Hyderabad, where the company is based, has already sent a preliminary report on Satyam. A status report has also been sent to the Central Board of Direct Taxes (CBDT).

The official said the department's investigation would look into whether the bank deposits shown were fake or real, TDS certificates submitted by the company from banks and if the tax deducted by banks was actually paid by them. Banks are obliged to deduct tax at source on interest payments more than Rs 10,000 in an year, against which they issue a certificate to the depositor.

A taxpayer can submit these certificates along with his or her income-tax return as a proof of payment of tax. A taxpayer who does not have tax liability, can get the TDS back, by submitting these certificates.

Under the provisions of the income-tax law, if any entity which is obliged to deduct tax at source, deducts tax but does not deposit it to the I-T department can face prosecution. If the deductee, does not deduct tax, it is liable to pay penalty equal to the amount to be paid and interest.

The probe into the TDS certificates submitted by Satyam, whose founder B Ramalinga Raju admitted to fraudulent accounting, and its bankers will help the authorities establishing a trail, the official said.

Mr Raju had said that the company's balance sheet as of September 30, 2008, carried non-existent cash and bank balances of Rs 5,040 crore as against Rs 5,361 crore reflected in the books. It also showed an accrued interest of Rs 376 crore, which is non-existent. Besides, the liability was understated by Rs 1,230 crore and debt owed to the company was overstated debtors' by Rs 490 crore as against Rs 2,651 reflected in the books.

courtesy : economic times

[Kalyan]

Post-Satyam, caution rules Job Street

With India's biggest corporate fraud coming to light after Satyam's disgraced promoter confessed that he fudged the company's accounts
for years, caution has become the name of the game for senior executives, say headhunting firms.

"Candidates today opt for companies which enjoy a 'clean image' in the market.

Executives are realising the kind of liabilities that can fall on them when they take up crucial roles in an organisation," says Executive Access India partner Charul Madan.

Stories abound of how a senior executive recently refused an offer to be the CFO of an international trading house as he was not confident about the standards of corporate governance practices being followed by the firm.

A non-executive board member, being lured by a FMCG company, is independently seeking information on issues related to promoters, investments and finances of the firm, say executive search agencies.

"The focus has shifted to more transparency and ethical business practices. In an environment like this, senior executives , especially those in the general management and finance domains, are making sure that they are satisfied with the level of transparency in the company before they join," says Transearch International managing partner Atul Vohra.

Candidates are increasingly asking search firms to provide them with adequate information besides carrying out independent searches, talking to both existing the former employees and conducting reference checks. They also keep an eye on the disclosures made by the company in the past. "Companies which conduct voluntary disclosures today enjoy greater credibility with candidates," says Korn/Ferry International technology partner Joy Nandi.

courtesy : economic times

[nithyasubramanian]

Desperate Raju scoured Gulf for succour?

HYDERABAD:  Tainted Satyam founder B Ramalinga Raju knocked every door, known and unknown, and even reportedly travelled to Dubai several times during 2008 in an apparently desperate attempt to raise resources before finally throwing in the towel and making the confessional statement.
Informed sources told TNIE that money from West Asia was the only hope left for Ramalinga Raju as funding from private equity and banks virtually dried up in the wake of the global recession.
By then, he had already milked the coffers of Satyam Computer Services to buy huge chunks of lands and meet the pre-operative expenses for the host of mega infrastructure projects taken up by Satyam's sister concern, Maytas Infrastructure.
Simultaneously, he had also fully pledged the shares of promoters with various lending institutions and pressure was building for repayment as the stock market kept sliding.
Sources said that Raju, along with a few other key functionaries, visited Dubai at regular intervals to raise money from high net worth individuals from West Asia who are known to invest in real estate projects in India.
Muslims in the Gulf generally do not invest in any asset that yields interest, since usury is forbidden by the shariat religious code. For the same reason, they keep away from the equity market too, and instead largely look to acquiring real estate property in various destinations.
A Hyderabad-based power-broker was said to have helped fix contacts for Ramalinga Raju in Dubai. Initially, he was said to have been promised substantial finances but before the deal was through the real estate m a r k e t i n Hyderabad was caught up in the vortex of the global recession.
A p p a r e n t l y tipped off by their contacts in Hyderabad about the downturn, the cash-rich investors dropped out. Pushed to the brink with declining cash reserves and falling stake in Satyam Computers (as the lenders started offloading Raju's shares), Ramalinga Raju made that now infamous last-ditch plan to save himself -- the aborted Maytas buyout.
When that too failed following resistance from institutional investors, his game was up.

courtesy Express Buzz

[nithyasubramanian]

Satyam money was siphoned off, not inflated

B. Ramalinga Raju, disgraced chairman of Satyam Computer Services, siphoned off the technology giant's revenues to acquire "controlling interest" in two of his own companies, a preliminary government investigation report said. The findings are in stark contrast to Raju's January 7 confession that said the company did not have cash reserves.

"Neither me nor the managing director took even one rupee/dollar from the company and have not benefited in financial terms," he had said. But preliminary investigations of the Registrar of Companies (RoC), a copy of which is with the Hindustan Times, clearly state that Raju and his accomplices had utilised the "cash reserves of the company to acquire controlling interest by purchase of shares in two other companies, owned and controlled by persons closely related to the promoter director of the company.

" While the RoC report did not name the companies, a senior official in the ministry of corporate affairs told Hindustan Times that the companies were Maytas Infrastructure and Maytas Properties, both founded and promoted by the Raju family. In fact, the Serious Fraud Investigation Office (SFIO), a multi-disciplinary quasi-judicial agency, has been specifically asked to find out whether "there was any siphoning of funds of the company".

Hindustan Times was the first to report that the Andhra Pradesh government was planning to look at governance practices at Maytas Infrastructure, following the disclosure on Satyam. The SFIO is also investigating "the existence and adequacy of internal financial controls and reporting within the company (Satyam) and lapses, if any".

The ministry had suo motu asked the RoC to begin investigations into Satyam accounts on December 17, a day after the tech giant made an aborted attempt to acquire Maytas Infrastructure and Maytas Properties for an estimated $1.6 billion (See story on page 25). While the mandate to verify the details have been given to the SFIO, RoC's prima facie investigations revealed that the company's publicly stated accounts contain serious "misstatements" and do not "reflect a true and fair view of the state of affairs of the company.

courtesy : Yahoo News.

[nithyasubramanian]

Techie Vishal's killer nabbed

HYDERABAD: The man who robbed and shot dead software engineer from the city Nandam Akshay Vishal in Little Rock, Arkansas, USA on Jan 13 has been arrested.
Identified as Brandon Johnson, the assailant, an Afro-American, has confessed to the crime.
Vishal, an employee of Satyam Computer Services, was working on a project for a client, Falcon Jet Airways, in Little Rock. His family resides here in Begumpet.
According to sources in the Ministry of External Affairs, investigators from the Little Rock Police Department have found some of the items belonging to Vishal in Johnson's possession.
"He confessed to the crime and further action is being initiated," sources said. Johnson was accused in over 10 murders and robberies, they added. However, it was still unclear why Johnson shot at Vishal despite the latter handing him over his wallet and other items. "Perhaps, he was under the influence of drugs or liquor,'' sources said. Meanwhile, all efforts are being made to bring Vishal's body home at the earliest.
"The Consulate General of India, Houston, DK Sharma is supervising the task. From the Baptist Medical Centre, where Vishal died while being operated upon, the body was shifted to the Coroner's Office at the State crime lab where the autopsy was conducted. From there, it will be sent to the Funeral Home at New Jersey and then flown to India," sources said adding that Little Rock, with high incidence of violence by Afro-Americans, was not a very safe area.

courtesy : Express Buzz

[nithyasubramanian]

Raju doesn't want to share cell with petty criminals

Hyderabad, Jan 16: Satyam's tainted founder Ramalinga Raju today asked the court for special treatment for him and his brother in jail, but the prosecution said those who made money at the cost of the poor don't deserve such privileges.

The Rajus' petition seeking special status in the Chanchalguda central prison, where they have been lodged till January 23, was filed before the sixth additional chief metropolitan magistrate's court.

The status was sought under rule 730 of AP Prisons Rules. Raju's lawyer Ravinder Reddy said they wanted a special cell for the Raju brothers as per the rules. The Raju brothers reportedly spent their time in jail since January 10 with dowry offenders.

After hearing the arguments of the public prosecutor as well as the defence lawyers, the magistrate posted the matter for further hearing on January 19.

The prosecution -- Andhra Pradesh CID, which had arrested Ramalinga Raju on January 9 -- said that Raju has become "unjustly rich at the cost of the poor."

Having committed such a "monumental fraud," Raju does not enjoy any status as such and the question of a special status does not arise, additional public prosecutor Ajay Kumar contended.

courtesy : Zeenews.com

[dwarakesh]

Satyam's expanded board meets to discuss fund raising

The new-look board of Satyam Computer Services began its meeting here to discuss among other things options to raise funds to keep the business alive.

The board, whose size was doubled with the induction of three members on Thursday, is likely to elect a new Chairman to steer the company out of the financial mess that its founder Ramalinga Raju led it into.

The government had appointed Tarun Das, T N Manoharan and S Balkrishna Mainak, on Satyam's board, which already has Deepak Parekh, Kiran Karnik and C Achuthan.

Discussions about the financial situation of the company in the backdrop of Ram Mynampati's SoS to the Corporate Affairs Ministry is expected to dominate the agenda, as also complaints from accounting regulator ICAI about the board's choice of auditor to restate Satyam's financials.

Although the board had appointed KPMG and Deloitte, ICAI had objected to the appointment of KPMG, since it is not a registered with the regulator.

The board has been mandated to protect the interest of over 50,000 Satyam's employees and stakeholders following Raju's revelation of accounts fudging.

The board is also expected to decide on the appointment of new CEO and CFO to bring back the company's operation to normalcy.

[VelMurugan]

Satyam's priority: Get CEO, CFO & funds


Hyderabad: Ahead of the crucial board meeting of Satyam Computer Services here today, Kiran Karnik, one of the six members of the newly constituted board of the crisis-ridden IT firm, said they may discuss the issue of funding as well as the appointment of CEO and CFO.

"The most important issue is funding.... I do think that if we can tie up some funding then it will give great comfort to the employees and to the customers...," Karnik told a TV channel.

On the possibility of the company tapping banks for funds, he said, "We need a bank loan...as this is a viable commercial company. This is not a so called bailout".

Bank loan has certain complications too and we will try to resolve them as we move on, he added. Besides, the board is also likely to discuss the appointment of Chief Executive Officer and Chief Financial Officer.

"The other important thing is an operational one. The company is running... but we need to look what we want to do in terms of management. There is a leadership team, but very quickly we need to get the CFO and CEO," Karnik added.
On Thursday, the Government had appointed CII chief mentor Tarun Das, noted chartered accountant and past ICAI president T N Manoharan and S Balkrishna Mainak of LIC – on Satyam's board, in addition to Deepak Parekh, Kiran Karnik and C Achuthan.

The board was given the tough task of protecting the interest of over 50,000 Satyam's employees and stakeholders following Raju's revelation of fudging accounts.

Source : in.com

[VelMurugan]

Satyam board may elect Chairman in meeting


Hyderabad: The six member board of Satyam Computer Services will meet on Saturday at its corporate office in Madhapur.

The second meeting of the new board is likely to elect a new Chairman, who is expected to steer the company out of the mud created largely by the disgraced founder-chairman B Ramalinga Raju.

The board also may discuss about the financial situation of the company in the backdrop of Ram Mynampati's SoS to the Corporate Affairs Ministry, couple of days ago.

The Government had appointed Tarun Das, T N Manoharan and S Balkrishna Mainak, on Satyam's board that will join Deepak Parekh, Kiran Karnik and C Achuthan.

The board was given the tough task of protecting the interest of over 50,000 Satyam's employees and stakeholders following Raju's revelation of fudging accounts.

The board is yet to decide on the appointment of new CEO and CFO to bring back the company's operation to normalcy. Although the board had appointed KPMG and Deloitte, ICAI had objected to the appointment of KPMG, since it is not the member of ICAI, which may also figure in the meeting.

Source : in.com

[VelMurugan]

Satyam Computer pays salaries to staff in US

There is a new lifeline for the beleaguered Satyam Computer Services Ltd. Highly placed sources in the State Bank of India have revealed the bank is not averse to giving a loan to Satyam as it believes the company's fundamentals are good.

In more good news for the IT giant, HDFC Chairman Deepak Parekh, one of the government nominees on the Satyam board, says the company has pending payments worth Rs 1,700 crore and if that sum comes through the IT giant won't need any bailout.

Parekh met Union Minister of Corporate Affairs Prem Chand Gupta on Thursday in New Delhi and said that the company has IOUs worth Rs 1700 crore.

Parekh also said that Satyam employees in the US have received their salaries.

"Large number of receivables and if the receivables come on time then financial assistance is not necessary. The restatement, accountants are saying, will take eight weeks. Collections are coming every day. It is a running company, it is a going concern. It is an ongoing running company. We have received some collections with which we have paid the salaries in the US today," said Parekh.

Meanwhile, the new board of Satyam is meeting on Saturday to chart a future plan.

The Union Government has nominated three more members to the Satyam board raising its strength from three to six.

CII's chief mentor Tarun Das, noted chartered accountant and a former president of ICAI TN Manoharan and S Balakrishna Mainak of LIC, a major investor in Satyam, would join Parekh, Kiran Karnik and C Achuthan at the board.

The government can appoint up to 10 members as per the order of the Company Law Board.

Source : ibnlive

[nithyasubramanian]

Satyam board appoints new chairman; seeks funds

Hyderabad, Jan 17: The new board of fraud-hit Satyam Computer Services on Saturday cleared the name of TN Manoharan, as the group's new chairman. According to reports, Manoharan is a former President of ICAI and also a part of the present Satyam board.

Besides Manoharan, the three-member audit panel of Satyam includes C Achuthan and S B Mainak.

Amarchand & Mangaldas, Suresh A Shroff and Co have been appointed legal advisers to Satyam board. Where as Chartered accountants Brahmayya and Co of Chennai have been named internal auditors with immediate effect.

The decision in this regard was taken by the board members, who met to look for ways to raise new funds after both the government and the company rejected talks of a state rescue bid.

The Satyam board has decided to meet on weekly basis with each member taking turns to chair meeting.

However, the search for CEO and CFO still continues. The board is currently engaged in discussions with banks and financial institutions to address liquidity issue.

Discussions about the financial situation of the company in the backdrop of Ram Mynampati's SoS to the Corporate Affairs Ministry is expected to dominate the agenda, as also complaints from accounting regulator ICAI about the board's choice of auditor to restate Satyam's financials.

Ahead of the crucial board meeting Kiran Karnik, one of the six members of the newly constituted board of the crisis-ridden IT firm, said they may discuss the issue of funding as well as the appointment of CEO and CFO.

"The most important issue is funding.... I do think that if we can tie up some funding then it will give great comfort to the employees and to the customers...," Karnik told a TV channel.

Another board member Tarun Das said, "Our priority is to safeguard Satyam employees and customer interests."

Satyam, India's No 4 software services exporter, has been battling for survival since chairman Ramalinga Raju suddenly resigned last week, revealing profits had been falsified for years and that USD 1 billion of cash on the books did not exist.

Media speculation of government aid has mounted as analysts questioned whether India's biggest corporate fraud had left the outsourcing firm with enough money to pay its 50,000 staff.

Meanwhile, NASSCOM has asked its members not to grab Satyam's clients. Reportedly, several Satyam clients have got in touch with it.

But Economic Affairs Secretary Ashok Chawla told reporters on Thursday that the government was not looking at any direct support for the company or bailout "at this stage".

Deepak Parekh, a senior banker and Satyam board member, said it had Rs 17 billion (USD 348 million) in receivables and may not need new funding if the money came in on time.

But Parekh added the board would consider bank loans if necessary.

However, reports suggested said that Satyam has not asked government for any financial aid. After the formation of the new Satyam board some banks have come forward and offered help to the troubled company. Earlier company's new board had sought bank loans.

The government, which dissolved Satyam's previous board last week, appointed three new directors on Sunday and another three late on Thursday to help steer the company out of crisis.

Company Affairs Minister Prem Chand Gupta said the first impression from the new directors about the company is that its operations are sound and that "by and large" major customers were willing to remain with the firm.

"All these are steps in the right direction ... but they need to get a CEO and CFO in place first to run the company's daily operations. That should be a priority," said Gajendra Nagpal, chief executive of Unicon Financial.

The expanded Satyam board is yet to decide on the appointment of new CEO and CFO to bring back the company's operation to normalcy.

Although the board had appointed KPMG and Deloitte, ICAI had objected to the appointment of KPMG, since it is not the member of ICAI, which may also figure in the meeting.

Satyam's shares jumped as much as 40 percent on Friday to 28.40 rupees after the government doubled the size of the board, but the stock has still lost over 80 percent of its value since the massive fraud was revealed.

Many questions about the accounting scandal remain to be answered: how large is it, who benefited, and how did the perpetrators manage to conceal it for so long?

Even if Satyam escapes a near-term cash crunch, it faces a long road to recovery.

The new board will have to keep clients from defecting to Satyam's rivals, fend off a growing number of lawsuits over the scandal and try to rebuild investor trust.

Lazard Asset Management said in a notice to the stock exchange on Friday it had sold all of its 5.3 percent holding in Satyam through open market transactions on Thursday.

Satyam's clients include corporate giants such as Nestle and General Electric.

Satyam's founder Raju, his brother who was the managing director of the company and the former chief financial officer, have been charged and are being held in a jail.

courtesy : Zeenews.com

[nithyasubramanian]

Auditors found no major risks in Satyam books

New Delhi, Jan 17: The statutory auditor of Satyam Computers, Price Waterhouse, has said that it found no "significant risks and exposures" during its audit of the scam-hit IT firm

  The minutes of Satyam's audit committee meeting, held on October 17, revealed on Saturday that a representative of the statutory auditor Price Waterhouse told the committee that "no significant risks and exposures have been noticed during our audit of the financial statements and as represented by the management for the quarter and six months ended September 30, 2008..."

The auditor also noted that "there have been no disagreements with management," and their audit "is designed to obtain reasonable assurance that the financial statements are fairly stated."

At the meeting, one of the independent directors Vinod Dham had enquired about the World Bank issue, on which the company's then whole-time director Ram Mynampati said that "the company has been servicing them for the last 10 years and has won many accolades and appreciations from the World Bank."

Mynampati further said that within two hours of misreporting about World Bank ban, "World Bank denied the rumours. The contract with World Bank ended in September 2008 and as per the policy of World Bank, it cannot continue beyond certain period... factored in the same in our guidance."

Another director Krishna Palepu said that despite the company's "best performance on all fronts the same is not being reflected in the stock performance" and he advised to review "if the company is lacking in communication front to the market." After this, T R Prasad advised "to present the performance of the stock in comparison with BSE IT index."

[nithyasubramanian]

Raju supported by followers despite fall from grace

Hyderabad, Jan 17: From his native village Garagaparru in coastal Andhra Pradesh to this IT hub, the disgraced founder and former chairman of Satyam Computer Services B Ramalinga Raju still enjoys a soft corner in the hearts of his followers, admirers and employees.

While people in the remote village in West Godavari district are thronging local temples to pray for Raju's well-being, some die-hard followers here are making the rounds of Chanchalguda Central Jail, where the former IT czar is lodged along with his brother B Rama Raju and former chief financial officer of the company V Srinivas.

Raju may have committed the biggest fraud in corporate India's history but for his admirers, he is still the hero.

"We are with you. Please don't loose confidence," says a placard tied to a tree outside the prison by one of his followers. "Wish you a happy and prosperous Sankranthi," says another.

Dozens of followers, including former employees and villagers from West Godavari district, have been making a beeline to the jail to express sympathy for Raju. Some even wanted to hand over a few books to him. However, they have been facing disappointment.

The jail authorities are allowing only Raju's family members and his lawyer to meet him. Raju's friend and Telugu Desam Party (TDP) legislator from Kovvur in West Godavari district P Venkata Krishna Rao also met him in jail.

The support of his followers is sure to lift the spirits of 54-year-old Raju, who was sent to jail on Jan 10, three days after he admitted committing over Rs 70 billion fraud in the company.

The son of a farmer, who made an humble beginning two decades ago and went on to build Satyam into India's fourth largest IT services firm, Raju is still hailed by his followers as the "Bill Gates of Andhra Pradesh".

"Who can forget his contribution to the growth of IT sector. Thousands of engineers from across the state got jobs because of him," said T Anil Kumar, a former Satyam employee.

Raju was often hailed as the "pride of Andhra Pradesh" for putting the state onto the world IT map. Raju's followers have even condoned him for manipulating company records saying he did it for the sake of company and its 53,000 employees. They are also hailing the confession he made while resigning as chairman.

People in Raju's ancestral village have thrown their weight behind the family. The usual festivities during three-day festival of Sankranthi, which concluded Thursday, were missing in the village.

The supporters put banners and flex boards, declaring their support to Raju brothers. One banner described Raju as 'Raraju' (king of kings). Another board refers to the social service taken up by Byrraju Foundation of the family.

"He is a great man who saved many lives," says a banner hailing the 108 ambulance service launched by Emergency Medical and Research Institute (EMRI), formed by Raju. Some banners refer to the drinking water scheme taken up by the foundation in 200 villages.

Raju's followers are trying to mobilise support for him. A silent procession will be held Monday in Bhimavaram town in West Godavari district. The Kshatriya community, to which Raju belongs, has thrown its weight behind the son of the soil. Rallies in his support are also scheduled to be held in several other towns and village on Jan 23.

[Kalyan]

Land allotted to Satyam now being handed over to Navy

A 50-acre land, "allotted" to Satyam Computers for setting up an IT Park at Kapuluppada village near Visakhapatnam, is now being
handed over to the Indian Navy.

On a request from Satyam, the state government "allotted" the land three years ago as part of its initiatives to promote growth of Information Technology companies in Tier-2 cities.

Though officially the land was not handed over to Satyam, the software company reportedly built a fence around the land and claimed ownership.

Visakhapatnam District Collector Sanjay Kumar, however, wrote to the state government after the Satyam scandal broke out, stating that the said land at Kapuluppada, located on the Visakhapatnam-Bheemunipatnam beach road was required for use by the Navy and the land available be allotted to it.

The state government accepted the Visakhapatnam Collector's proposal and decided to "cancel the earlier allotment".

"Since Satyam was not given possession of the land, the allotment order would be cancelled," state Finance Minister K Rosaiah said here today.

Satyam was also allotted a 6.55-acre land at Resapuvanipalem in Visakhapatnam in 2005 for an IT Park. Satyam purchased the land for Rs 5.01 crore and signed a memorandum of understanding with the state government on May 10, 2005 for providing employment to 2,000 people in seven years.

Chief Minister Y S Rajasekhara Reddy inaugurated the phase-1 building in the IT Park in 2007. As per government records, only 680 persons, including 150 under training in Hyderabad, were appointed till date by Satyam.

courtesy : economic times

[Kalyan]

Raju may have diverted funds diverted from Satyam

Corporate affairs minister Prem Chand Gupta on Sunday said Satyam's disgraced chairman B Ramalinga Raju's confession of fudging
Satyam Office balancesheets was not true and the government believed that prima facie the accused may have diverted funds from the IT major.

"Facts and figures stated in the balancesheets are not based on correct information... lot of wrong has been done," Gupta was quoted as saying by a news agency. The minister also denied that there was any need to hand over the probe to CBI.

The government's admission of possible money laundering by the promoters of Satyam could put pressure on the investigative agencies to attach properties of Maytas, the real estate and infrastructure arm of the beleaguered IT company.

Maytas's turnover had shot up from a few hundred crores to thousands of crores in a matter of a few years, having accumulated a landbank of more than 7,000 acres in and around Hyderabad. Raju's infrastructure companies, run by his sons, had successfully bid for a number of projects estimated to be worth over Rs 30,000 crore in several states, including Andhra Pradesh, Maharashtra, Orissa and Himachal Pradesh.

The pressure to include Maytas in the ambit of the ongoing probe seems to be mounting on the government from political quarters as well. In a letter written to PM Manmohan Singh, CPM general secretary Prakash Karat said a probe by the Serious Fraud Investigation Office in the Satyam Computers alone was not sufficient.

"In the light of nexus between the Satyam-Maytas group of companies, the probe should be extended to all the Maytas concerns," Karat wrote.

source : economic times

[dwarakesh]

No finance extended to Satyam: SBI Chairman

VIJAYAWADA: State Bank Group Chairman O.P. Bhatt has said that the State Bank of India (SBI) has not extended any finance to the scam-tainted Satyam Computer Services Limited, though it had given a loan of Rs. 240 crore to Maytas Infra, the firm promoted by B. Ramalinga Raju's family.

"The loan given to Maytas Infra was with full security," Mr. Bhatt made it clear, speaking to reporters here on the sidelines of an assets' distribution programme on Sunday.
General insurance

Mr. Bhatt said the SBI had entered into the general insurance sector by signing a Memorandum of Understanding with a 'partner', whose name he refused to divulge on the grounds that the RBI nod was awaited.

[dhilipkumar]

The Satyam effect! Engineering aspirants ignoring IT sector



CHANDIGARH: The Satyam scandal, which has shattered the dreams of the company's employees, has a worse effect on aspirants from Punjab and Haryana, as they are not only keeping the Hyderabad-based firm out of their options, some of them are also shunning jobs in the IT sector as well. Engineering students from the two states who were placed with Satyam Computer last year have now changed their minds and are aggressively looking for jobs in other IT firms as well as companies in other sectors following the disclosure of the biggest-ever corporate fraud by the company.

"I was offered a job as trainee employee at Satyam last year. But after the fiasco has happened at Satyam, I have changed my mind to get suitable job in other firm," said Divyadeep Goyal, a student Mechanical Engineering student of University Institute of Engineering and Technology (UEIT), who was offered an annual package of Rs 3.25 lakh in Satyam.

Echoing similar views, Sumant, another final-year student of the same college, said, "The impact of Satyam fraud has been so damaging that we now do not have any intention to join the IT company. Rather we will look for job in other sectors."

The total number of engineering students placed by Satyam from this region was not available but some colleges have shared their placement figures. Almost 80 students from the Institute of Engineering and Technology were selected by Satyam last year, while 13 students were placed from Punjab Engineering College (PEC) and seven were from UIET. Students were offered an annual package between Rs 3 lakh and 3.5 lakh.

According to placement officers of various colleges, engineering students are now looking at the core sector, comprising manufacturing and telecom sectors.

"This time we are witnessing a change in trend of students' preference towards job placements. They are now finding the core sector an appropriate one as far as employment is concerned," PEC Chief Placement Officer Saurabh Dhiman said. But there are some job seekers who have kept Satyam as last option for employment. "I intend to move into the core sector. But if I do not get job in any other sector then my last option will be to join Satyam as I am hearing from my friends that situation there will improve," said Harshal, a mechanical engineering student at PEC, who was offered a Rs 3.5-lakh package by Satyam.

[dwarakesh]

Ex-Satyam BPO chief in contention for CEO post

Even as the buzz around Vivek Paul's candidature as CEO is still doing the rounds at Satyam Computer Services, insiders say the government is considering a person who was an integral part of the company till three months ago.

The name of Venkatesh Roddam, former CEO of Satyam's BPO subsidiary Nipuna, is being seriously considered, since Paul is not keen to return to India, according to highly-placed sources. The search for a CEO has been following founder Ramalinga Raju's disclosures of financial fraud January 7 and his subsequent arrest.

Roddam, who is taking a break from corporate life and lives in Hyderabad, said: "I'm not too sure what is happening. I am getting calls from close friends and relatives who are asking me about this."

Roddam did not, however, offer a direct reply when he was asked if he was interested in the post but suggested he was not averse to it either. "It is a fantastic company to work with. It's an interesting and challenging role. They have a competent board now, to provide all kinds of support," said Roddam who worked for Nipuna for about three years.

Last week, Business Standard reported that the government had exhorted the new board, whose six members it has nominated, to look within the company or identify a person who knew Satyam's operations well, for the post of CEO and CFO.

Roddam was reportedly a natural choice because of his association with Satyam and Raju, who had recruited him directly. Roddam is an MBA and has spent 18 of his 21-year professional career in financial services and banking in India and overseas. Before joining Nipuna as CEO, Roddam worked with Deutsche Bank for almost nine years based in Frankfurt.

Roddam resigned from Nipuna towards the end of September last year when several other senior executives, including Satyam's chief strategy officer Shailesh Shah, also resigned.

Source: Business Standard

[dwarakesh]

Raju beats Obama on web popularity charts!

He may be popular for all the wrong reasons, but Satyam's disgraced founder Ramalinga Raju has beaten US President-elect Barack Obama on internet popularity charts in India, and is closing the gap abroad too.

By now infamous IT czar Raju shot to limelight earlier this month after disclosing what has emerged as the country's biggest ever corporate fraud in India and has been called 'India's Enron´ right from the word go.

Google's search volume index shows Raju and Obama were generating almost equal searches from India during the first six days of the year, with Obama leading by a small margin.

However, Raju jumped up the charts on 7 January, when he admitted to a massive fraud of about Rs 7,800 crore.

The search volumes for Raju are estimated to have been over 10 times more than that of Obama on 7 January, after which it has been declining consistently but Raju is still holding an edge over the US President-elect.

In terms of search volumes generated from various regions, Raju's own state Andhra Pradesh is on top, followed by Tamil Nadu, Karnataka, Gujarat, Maharashtra and Delhi. In terms of cities too, the maximum search volume has been from Hyderabad, where both Raju and Satyam are based, followed by Chennai, Bangalore, Pune, Mumbai, Mahape and Delhi.

As regards searches for Obama, Tamil Nadu has been on the top, followed by Maharashtra, Karnataka and Delhi among the regions. For cities, the maximum search volumes for Obama has come from Chennai, Mumbai, Navi Mumbai, Bangalore and Delhi.

Outside India too, Raju has generated significant search volumes from UAE, Singapore, Finland, US, Poland, Australia, UK, Canada and Germany, but has lagged Obama.

Raju has been searched for in Abu Dhabi, Singapore, Dallas and San Fransisco, while search queries have come in Polish language too, other than English.

[dwarakesh]

Satyam talking to Citi, BNP for funds

The new board of embattled Satyam Computer Services has asked Citigroup and BNP Paribas, the company's bankers, to help it with immediate funding needs, a top board member said.

"We talked to the existing bankers -- Citibank and BNP Paribas -- and requested them to understand the situation, provide additional funding and give them (Satyam) more time to repay loans," Deepak Parekh, a senior banker and a newly-appointed Satyam board member, was quoted as saying.

Satyam, India's No. 4 software services exporter, has been battling for survival since Ramalinga Raju resigned as chairman earlier this month, revealing profits had been falsified for years and that $1 billion of cash on the books did not exist. A government-appointed board, which met on Saturday, said it was still looking for a new chief executive and chief financial officer for the outsourcing firm at the centre of India's biggest corporate scandal.

In a separate report, Indian Prime Minister Manmohan Singh was quoted as saying the Satyam scam was a risk to India's corporate image.

"It indicates how fraud and malfeasance in one company can inflict suffering on many and can also tarnish India's image more broadly," the Financial Express quoted Singh as saying at an awards function in Mumbai.

"The government is determined to unravel the full nature of the fraud and to punish those involved under the due process."

Satyam founder Raju, his brother, who was the managing director of the company, and the former chief financial officer have been charged and are being held in a jail.

On Saturday, a Hyderabad court ordered the three to be moved into police custody for four days from Sunday for further questioning, VSK Kaumudi, inspector general of police in Hyderabad, told Reuters.

[VelMurugan]

US client cancels contract with Satyam


Bangalore: Fraud-hit Satyam Computer Services said on Monday a US-based client had cancelled its contract, dealing a blow to the embattled Indian outsourcer caught in the country's biggest corporate scandal.

State Farm Insurance Co has terminated its contract, a Satyam spokeswoman said, but she declined to give details of the contract.

"While we are disappointed in State Farm's decision to discontinue services, our executives are reaching out to clients around the world, and at this point, well over 90 per cent of our clients have committed to continuing with Satyam," she said.

Satyam, India's No. 4 software services exporter, was plunged into crisis after Ramalinga Raju resigned as chairman earlier this month, revealing profits had been falsified for years and $1 billion of cash on the books did not exist.

A Government bailout is seen as key to ensuring the company has enough cash in the short term and to restore flagging investor confidence, analysts said.

Some of Satyam's clients might cancel orders, wary of business risks in the fraud-hit company, analysts said.
"Any customer dealing with Satyam at this point in time will be concerned with what is happening at the company now," said R.K. Gupta, managing director at Taurus Asset Management in New Delhi.

A government-appointed board at Satyam said on Saturday it was looking for a new chief executive and chief financial officer for the outsourcing firm at the centre of a scandal dubbed as "India's Enron".

The board, which also discussed scheduling of vendor payments, said it had received expressions of support from clients including Nestle and General Electric.

Shares in Satyam, which have tumbled about 85 per cent since the scandal broke, were up 5.7 per cent at 25.85 rupees by 0605 GMT in a weak broader market.

On Sunday, a metropolitan court ordered the former chairman, managing director and chief financial officer of Satyam to be taken into police custody for four days from Sunday, after spending nearly a week in jail.

Under police custody, accused are held in a police lock-up to help the investigators in interrogation.

Source : IndianExpress

[VelMurugan]

Satyam's liabilities not much: Govt


New Delhi: The Government said prima facie there appeared 'diversion' of funds from scam-tainted Satyam where the facts and figures in the balance sheet are not based on correct information.

"Prima facie aisa lagta hai ki diversion of funds ka kuch issue hai, jo facts and figures balance sheet mein show kiye gaye hai, they are not based on the correct information... galat kaam toh bahut hua hai," Corporate Affairs Minister Prem Chand Gupta told PTI on how serious the Satyam crisis was.

Asked if there was a need to hand over the Satyam case to CBI in the face of reports of involvement of politicians with company's founder B Ramalinga Raju, he said, "As of now no such thing has surfaced... whatever is needed will be done... the Government has ordered inspection of eight companies (Satyam subsidiaries)... investigation by SFIO has also been ordered".

On a query if the Government feared a major land scam in Satyam's Maytas fiasco, the minister said he was not in a position to make any political statement on the issue.

At the same time he said the first information about Satyam is encouraging as the company's liabilities were not much. "Information ke hisaab se company ke upar bank aur institutions ki koi major liability nahi hai".

Source : Indian xpress

[VelMurugan]

All efforts to pay salaries on time: Satyam

Hyderabad: The newly constituted board of troubled Satyam said it was looking for funds, for which it has opened a dialogue with lenders, to ensure salaries to employees and normal business operations, even as the search for a new CEO and CFO continued.

Meeting for the second time in a week, the board is still awaiting appointment of chairman by the Centre and till such time each of the six directors would take turns to chair the meeting that would be held on a weekly basis.

Outlining the priorities, the company said in a statement after the meeting that "addressing the issue of liquidity the board confirmed that it is engaged in discussions with banks and financial institutions.

"The last week had seen definite improvements on collection and this is expected to be a major priority for the business leaders and the board in the ensuing weeks. All efforts are being made to ensure that associates (employees) are paid their salaries on time."

Incidentally, representatives of a few lenders, including Citibank and ICICI Bank, visited the Satyam headquarters here, presumably for discussions with the new leadership of the IT company.
The board, which was expanded on Thursday by the Government with induction of three more members, also discussed scheduling of vendor payments.

The meeting also constituted an audit panel and appointed legal advisers - Amarchand & Mangaldas, Suresh A Shroff & Co -to the board, and internal auditors - Brahmayya & Co.

The board reposed its faith on employees and customers, saying it was confident of the employees and their ability to continue delivering high quality work and continued support from the customers, which it said "is a very encouraging sign."

Source : Indianxpress

[VelMurugan]

Satyam opens up over 9 pct

Mumbai: Satyam Computer on Monday opened on a positive note amid Corporate Affairs Minister Prem Chand Gupta's statement that the first information about the scam-ridden company is encouraging as the company's liabilities were not much.

Shares of Satyam surged 9.20 per cent in early trade to touch an intra-day high of Rs 26.70. However, the stock was later trading at Rs 26.20, up 7.17 per cent on the Bombay Stock Exchange.

Similar fate was seen on the National Stock Exchange, the scrip touched an intra-day high of Rs 26.70, a jump of as much as nine per cent from its previous close.

It was later quoting at Rs 26.20, up 6.94 per cent. Over 1.97 crore shares were traded on both the bourses.

Meanwhile, Gupta had said, prima facie there appeared diversion of funds from scam-tainted Satyam where the facts and figures in the balance sheet are not based on correct information. He, however, said the first information about Satyam is encouraging as its liabilities were not much.

Gupta further said members of the newly-constituted board would not be held responsible for what was done by the previous board, which was disbanded by the Government after the Rs 7,800-crore fraud, came to the light.

Source : Indianxpress

[Kalyan]

Benami trail may be difficult to trace

There is little chance that Satyam Computer Services will get back the cash suspected to have been siphoned off from it if the money
Satyam has been used to buy land or other real estate in 'benami' deals involving proxy owners.

The software firm may also lose any money that may have found its way into proxy bank accounts because a two-decade-old law to curb benami transactions remains hobbled by lack of rules, government officials said.

Satyam founder B Ramalinga Raju claimed on January 7 that he orchestrated a doctoring of the company's books to inflate sales, profits and cash balances in a fraud estimated at over Rs 7,000 crore. But investigating agencies suspect that much of the money actually existed and could have been diverted to buy assets in India or overseas.

The Hyberabad-based company is now fighting a battle for survival, with a government-appointed board desperately looking for loans to pay salaries to over 50,000 employees and keep operations from grinding to a halt.

"Courts can restore the assets to the rightful owner only if the money has not been invested in benami property or accounts," said a senior official of the central government.

The Serious Fraud Investigation Office and the tax authorities will try and trace the cash missing from Satyam, and some are hoping that at least a part of the money that is recovered can be restored to the company.

Authorities in Andhra Pradesh are scanning the ownership titles of land said to belong to the Raju family. "Mr Raju and his family members may have also bought land under benami names. But we cannot track the source of funds used to acquire these lands," said a senior state government official.

The Benami Transactions (Prohibition) Act 1988 governs dealings involving proxies to conceal the identities of the real owners, but the law has yet to become operational because its rules have not been firmed up.

"The government may have to answer questions on the delay in operational an important legislation if the money has been diverted into benami transactions," said a former top official with a regulatory agency.

The government has reportedly been working for the last six months to amend the law to make it easier to gain control of benami property.

Among the changes being considered is a redefinition of benami property to classify it as belonging to 'non-existent' persons without known sources of income. A separate agency may be created with powers to 'deem' property benami and impound it without getting into the details of whether the owner had the financial capacity to buy the property or not.

But changing the law could take a lot of time and the issue may not be high on the agenda of a government that is gearing up for general elections in a few months, the official said.

source : economic times

[VelMurugan]

Raju may have siphoned cash: Report

New York: B Ramalinga Raju, the founder and former head of Satyam Computer Services may have skimmed huge amounts of cash from the company, rather than padded its books as he claims, according to a report in the 'New York Times' that cited a person involved in the Satyam investigation.

Satyam, India's No. 4 software services exporter, has been battling for survival since Raju resigned as chairman earlier this month, revealing profits had been falsified for years and that $1 billion of cash on the books did not exist.

Investigators looking into the fraud have found a maze of about 300 companies related to Raju that were used to siphon as much as $1 billion in cash from Satyam, the report said, citing a senior official involved in the inquiry.

The article said the picture emerging from the investigation of Satyam is very different from the one painted by Raju in a letter to Satyam's board earlier this month.

In the letter, Raju said about $1 billion of Satyam's cash was "non-existent" and that he had falsified its profits for years to avoid losing control of the company.

Raju said neither he nor his brother, B. Rama Raju, who co-founded Satyam, "took even one rupee/dollar from the company."

The New York Times report, citing the person involved with the investigation, said the entire $1 billion Raju said was faked might have actually been earned by the company but then skimmed from it.

A spokesman for Satyam declined to comment on the report.

The report said Raju's lawyer did not return calls seeking comment.

Source : Indianxpress

[VelMurugan]

Raju's bail plea deferred till Jan 22

Hyderabad: A city court on Monday deferred to January 22 hearing on separate petitions filed by Satyam's tainted founder Ramalinga Raju seeking bail and special status in jail and another filed by market regulator SEBI seeking custody of Raju and two others.

The 6th additional chief metropolitan magistrate will take up hearing of Raju's plea for bail as also special status in jail on Thursday as he is in police custody till then.

The plea of SEBI for a day's custody would also come up on that day when his custody with the police ends.

The court had sent Raju, his brother Rama Raju and Satyam's former CFO Vadlamani Srinivas to police custody to facilitate a probe into the Rs 7,800 crore financial fraud disclosed by the IT firm's founder on January 7.

Source : Indianxpress

[Kalyan]

Ruias keen to buy Satyam's BPO business

Aegis BPO, the Essar group company keen on acquiring the BPO business of Satyam Computer Services, has highlighted "operational
synergies" between the two businesses as a key rationale for the transaction in its formal bid approach submitted to the new Satyam board, a senior Essar executive told ET.

While several senior Aegis BPO officials are scheduled to travel to the US this week, what is not known at this stage is whether members of Aegis BPO's senior management will meet a few key clients of Satyam BPO in the US to emphasise its serious intent in trying to protect the interests of the company's employees and clients, said an executive
who asked not to be named.

Aegis, controlled by the Ruias of Essar, could well be a frontrunner to acquire Satyam's wholly-owned BPO after it formally sent an expression of interest (EoI) to the Satyam board that strongly emphasises the synergy between the two companies as they have customers in the same sectors. Aegis BPO, which has annualised revenues of around $500 million, has some 15-odd Fortune 500 companies among its global clientele. An Aegis BPO director, however, declined to reveal the names of its Fortune 500 clients, citing "confidentiality and non-disclosure issues."

Financial circles familiar with the matter expect a string of suitors to emerge for Satyam's outsourcing arm in the weeks ahead. "Aegis BPO has sent an expression of interest to the Satyam board, indicating its interest to acquire Satyam BPO. Aegis will put in a more detailed follow-up economic offer after the Satyam board takes a call on the EoI," the Essar executive said.

Aegis BPO, however, declined to say if the company had put in a bid approach, only confirming that it remained on the lookout for acquisitions.

"We never comment on any evolving transaction. But we are constantly scouting for opportunities that have a strategic fit with our outsourcing business. Aegis BPO has successfully integrated its 11-odd acquisitions of various sizes and magnitude encompassing scale, geographies, cultures and practices," Aegis BPO's CEO Aparup Sengupta told ET.

None of the members of Satyam's new board, who were appointed by the government earlier this month to save the company from collapsing, could be reached for comment. The new board is yet to appoint banks or formally spell out the process for a sale of Satyam or parts of the company, although some suitors have indicated interest in acquiring parts or the whole of Satyam.

The Essar executive said an Aegis-Satyam BPO alliance would be in the long-term of interest of Satyam BPO's 3,500-odd employees and its leading international clients. Aegis BPO employs around 32,000 employees globally.

Both Aegis and Satyam BPO work with companies in the telecom, banking, finance and insurance sectors. Satyam BPO's biggest international clients reportedly include BellSouth, Verizon and GlaxoSmithKline.

Aegis BPO 's mergers & acquisitions team is keen to do a detailed assessment of Satyam BPO's books to understand its revenue streams, especially its external revenues.

"Any valuation exercise of Satyam BPO will try to ascertain the degree of Satyam BPO's business dependence on parent Satyam Computers for contracts. It will also try to assess what percentage of its annual BPO revenues are purely derived from its overseas clients. This assessment is critical in the run up to a possible economic offer to acquire Satyam BPO," said the Essar group official.

source : economic times

[VelMurugan]

Satyam needs money to pay salaries

NEW DELHI: Satyam Computer Services Ltd, under investigation for fraud, is in talks with banks to overcome a cash crunch that may leave the software maker without enough money to pay salaries and utility bills.

The government-appointed board is seeking funds, looking for a new chief executive officer and improving revenue collection, Satyam said in an emailed statement.

India's fourth-largest software exporter is being probed after founder Ramalinga Raju said on January 7 he overstated profits.

"All efforts are being made to ensure that the employees are paid their salaries on time," the company said. The board members are "in touch with key customers and so far have not heard of deliveries being affected in any way."

State Farm Mutual Automobile Insurance Co, the largest home and auto insurer in the US, cancelled its Satyam contract, dealing a blow to the Hyderabad-based company's efforts to persuade customers it can fulfill their orders. Satyam needs clients including FIFA, soccer's governing body, to keep paying after the government ruled out a bailout and the company said it may take three months to sort out its accounts.

The Satyam episode "is a blot on our corporate image and indicates how fraud and malfeasance in one company can inflict suffering on many and can also tarnish India's image more broadly," Prime Minister Manmohan Singh said in Mumbai.

Pending payments
Satyam won't know how much it needs until auditors confirm assets and assess how much clients owe, director Deepak Parekh said. Satyam has Rs 17 billion ($348 million) of pending payments from customers, he said.

The board will now meet once a week and members will take turns to chair meetings until the government appoints a chairman, statement said.

The board also appointed Brahmayya & Co as internal auditors of the company and Amarchand & Mangaldas and Suresh A Shroff & Co as legal advisers to the board.

Directors T N Manoharan, C Achuthan and S B Mainak will make up an audit committee.

"The new board is doing everything to try and stabilise the situation, find a new chief executive officer, reassure clients, but all this takes time," said Krupal Maniar, a Mumbai-based analyst at ICICI Securities Ltd. "Unfortunately, time is what's against them."

Promise to banks
India's government has assured state-run banks it won't hinder their seizure of pledged properties if Satyam's subsidiaries fail to meet loan payments, the Economic Times reported.

State-run banks have lent Rs 20 billion to subsidiaries of the computer-services provider and hold securities valued at Rs 27 billion, the report said, citing a finance ministry official who declined to be identified.

Ram Mynampati, removed from the board after a three-day stint as interim chief executive officer, and executive Virender Aggarwal are meeting with customers in the US and Singapore, the company said.

Bloomington, Illinois-based State Farm told Satyam that it was terminating the order. "The current uncertainties surrounding Satyam's future and potential impact to State Farm resulted in this decision," spokesman Jeff McCollum said in an email.

Satyam doesn't comment on specific clients, the company said in a mobile-phone text message.

CEO speculation
Vivek Paul, the former vice chairman of Wipro Ltd, India's third-largest computer-services provider, in an intervie
w to Economic Times said, "First of all, it is not my place to assess whether I can do the job, and neither anyone from Satyam has contacted me."

Paul quit private equity firm TPG last month, where he had been a partner since leaving Wipro in October 2005.

Mark Mobius, who oversees about $26 billion in emerging- market stocks as executive chairman of Templeton Asset Management, said his fund sold all its shares in Satyam and didn't lose money because it "got out early."

"We have analysts on the ground and we had been suspicious for a while," he said in Kuala Lumpur. "So we were gradually reducing what we had there."

Raju, 54, was arrested on January 9. He, his younger brother and former managing director Rama, and former chief financial officer Srinivas Vadlamani have been remanded to judicial custody until January 23.

FIFA role
Satyam is reassuring FIFA, based in Zurich, that the company can continue its role in the 2010 World Cup, Sridhar Maturi, who runs sports marketing at Satyam, said.

Dilbagh Gill, Satyam's head of sport, spent two days in Zurich this week with FIFA officials, he said. Satyam, the first Indian company to sponsor a World Cup, is meant to be FIFA's official information-technology provider until 2014.

Nestle SA, the world's largest food company and a Satyam client, said it is considering alternative solutions to avoid disruption of information-technology operations.
Telstra Corp, Australia's largest telephone company, said Satyam's disclosure will be a factor when it cuts two of its four major IT suppliers this year.

Source : indiaTimes

[VelMurugan]

Satyam: 3 weeks to assess books

NEW DELHI: Fraud-hit Satyam Computer said it expects auditors to take three weeks to discover the true state of the outsourcing giant's finances, a company spokesman said on Monday.

The comments came after the New York Times quoted an unnamed investigator as saying Satyam founder B Ramalinga Raju pocketed huge amounts of cash from the company -- rather than just padding its books as he has claimed.

"The accounts are getting tallied for where the anomalies are," the Satyam spokesman told reporters. "The auditors are doing this."

"It is going to take three weeks for a judgment (by the auditors) of how much has gone, and where it has gone," the spokesman said.

India's business community has been rocked by a statement from Raju earlier this month in which he declared he had created a fictitious cash balance of more than one billion dollars and inflated profits for years.

The New York Times, however, said investigators had found a "maze" of 300 companies related to Raju that were used to siphon money from Satyam.

Raju, a pioneer of India's outsourcing boom, was questioned on Monday by police for a second day about his confession that over a billion dollars of the company's cash was "non-existent."

He has previously insisted he had not "taken even one rupee/dollar from the company." PricewaterhouseCoopers audited the company's financial statements for years and is now being probed by India's accounting board. It has been replaced by accounting houses KPMG and Deloitte Touche Tohmatsu.

Meanwhile, the company spokesman said Satyam's government-appointed board was searching for a new chief executive and chief financial officer but that the hunt was "absolutely at early days."

The spokesman denied a report in India's Economic Times that the board was set to name an investment banker to scout for a buyer for the company.

The spokesman said the company was focusing on "day-to-day operations" and meeting clients "to assure them what has happened will not affect business continuity, that onsite work will continue."

Satyam generates 97 per cent of its revenues outside India. Its more than 600 clients include a third of the Fortune 500 companies such as food giant Nestle SA.

"Employees are reporting to work on time, morale is still high, everyone is trying to keep their chin up," the spokesman said.

Source : IndiaTimes

[dwarakesh]

Satyam Computers losing big customers?

HYDERABAD: At least half a dozen "big customers", together contributing about 20-25 per cent of the company's revenues, are on their way out of the fraud-hit Satyam Computer Services.

Among the big customers reconsidering their continuance with Satyam are companies in healthcare, telecom, energy and insurance.

A senior executive of the company, who is privy to the negotiations with the customers, expects at least 15-20 per cent attrition on the customer side and also on the employees' front.

Some big and a few midsize customers asked the company to sort out the issues and also keep them posted on its plans on how it was going about.

"Nobody will tolerate uncertainty for too long," said the executive.

Some customers also served vendor transition notices, but with rider that if Satyam is not able to set things right in order to safeguard the business interests of the customers.

The company, on its side, was telling them that it was just a week since it was rattled by the confession of its erstwhile Chairman B. Ramalinga Raju and it needed "little more time to come to terms" before it picked up the threads.

However, transition of a big project is not easy. Knowledge transfer process involves validation of methodology of transition. The customer will have to work with the software vendor, handhold the company and supervise the independent performance of the vendor. Each of these three stages takes one month, because most of the projects are mission-critical.

Source: The Hindu

[dwarakesh]

Satyam clients have approached us: TCS

The country's largest software exporter, Tata Consultancy Services (TCS), today said some Satyam Computer clients have turned to the Tata company on their own, adding it would not approach the clients of the scam-tainted firm.

"We are not approaching the clients of Satyam pro-actively... But some of them have approached us on their own," TCS CFO S Mahalingam said here on the sidelines of the CII Partnership summit.

According to reports, a US client has terminated its contract with Satyam following the disclosures, citing uncertainty in the company.

It is widely believed that Satyam Computers' clients will migrate to competitors such as Infosys, TCS and Wipro, and according to a broking house report, TCS is likely to gain the most from it because it has the highest number of common clients with the latter.

Mahalingam said Satyam is a one-off incident but enough checks and balances should be there to prevent such occurrences.

Source: Business Standard

[dwarakesh]

Satyam withdraws damage suit against Upaid

Beleaguered Satyam Computer Services has withdrawn the disparagement case against UK-based mobile solutions firm Upaid. A Satyam spokesperson confirmed that the company had withdrawn the disparagement case, but did not give any reasons for the same.

Upaid Chairman and CEO Simon Simon Joyce told Business Standard, "Yes, Satyam has withdrawn the disparagement case and they have done so unilaterally. But I do not think that this will impact the primary case of fraud and forgery.

We have been saying this from the very start that both these cases are different though the earlier management at the IT firm wanted to connect them." The primary case comes for hearing in June 2009 at the Texas Court.

Source: Business Standard

[dwarakesh]

Satyam fast-tracks search for buyers, to appoint banker

With no financial bailout in sight for the troubled Satyam Computer Services, the new government-appointed board is understood to have speeded up the process of appointing a merchant banker to identify potential buyers for the company.

Highly-placed sources aver that the new board recognises that it's the potential liabilities that could arise from the 12 class-action suits that are acting as a major deterrent to potential buyers. "Talks are on with the merchant bankers. However, the potential buyers — both foreign and domestic — are waiting to see how bad the news can get. Till now, they have no clue as to what's happened with the cash," an industry source, close to the developments, pointed out.

Meanwhile, the government-appointed Satyam board member Kiran Karnik reportedly said the company is viable and will make profits soon and Deepak Parekh (another board member) said the company has receivables of around Rs 1,700 crore (minus Rs 400 crore debts and a Rs 200 crore forex loss).

The process to seek a buyer needs to gather momentum since analysts and research firms aver that around 40 per cent or up to $1 billion of the Satyam revenue pie could get redistributed among other IT players by the end of the fourth quarter of CY09.

Effectively, around 25 per cent of Satyam's revenue ($500-600 million) could be affected by FY10, as not all of this gets out in the beginning itself or not all contract exits are upfront, note Edelweiss analysts Viju George and Kunal Sangoi. They assume that about 70 per cent of revenues are up for renegotiation or renewal in Q1 and Q2 of this fiscal. A larger proportion of Satyam's revenues are non-annuity based and thus come up for renegotiation/renewal more often, they explain.

Clients of the troubled IT services provider have already approached outsourcing advisory and research firms like Booz & Company and Forrester in a bid to review their relationships with the company, following the admission of a financial fraud by former chairman Ramalinga Raju.

This is an opportune time for them since client budgets are arranged at the beginning of the calendar year. A drastic redistribution of market share in favour of other IT services providers in an overall stable-to-declining IT services market is likely as early as the first quarter of calendar year 2009 (January-February 2009), note the Edelweiss analysts.

On its part, the new board has constituted an audit committee, an internal auditor and a legal advisor the board. Moreover, till such time that a Chairman is appointed by the Central Government (in line with the directions of the Company Law Board), it has decided that one of the members of the Board will chair the meeting, by rotation.

The Board also confirmed that the search for the CEO and CFO continues and that till such time these appointments are concluded, it will continue to meet on a weekly basis, to address ongoing issues. The board members reiterated that they are in touch with key customers and so far have not heard of deliveries being affected in any way. The board reaffirmed its confidence in its associates (employees) and their ability to continue delivering high quality work, as per the stated Service Level Agreements.

"If Satyam's business can be sustained for the next two-three quarters, then there is a possibility of a revival and that can happen if Satyam is able to restore client confidence by meeting the service levels," opined Sabyasachi Satpathy, Director and Co-founder of Mindplex Consulting, an outsourcing advisory services firm.

Source: Business Standard

[dwarakesh]

Satyam faked employee numbers

Police investigating Satyam Computer Services have confirmed the outsourcing giant was a lot smaller than it had led people to believe.

According to the The News, Satyam had 20 per cent fewer staff than it claimed. The fake employees were paid but the money would go to as yet unnamed people.

The fake employee scam was discovered by the Serious Fraud Investigation Office who said that since a major chunk of the costs were actually salaries, a minor distortion in the number of employees could change the personnel expenses significantly.

A Satyam spokeswoman who appeared to be real told the News that she believed the staff numbers are accurate at this point of time.

Of course she might not believe that later in the week when the imaginary people fail to return from holiday.

The company's website claims it had 53,000 staff, including those in subsidiaries and joint ventures as at end-September.  Since the scandal broke more than 2,000 staff have left.  We assume that these people may have been real.

[VelMurugan]

Ex-Satyam chief Raju may have siphoned cash: Report

New York: B Ramalinga Raju, the founder and former head of Satyam Computer Services may have skimmed huge amounts of cash from the company, rather than padded its books as he claims, according to a report in the New York Times that cited a person involved in the Satyam investigation.

Satyam, India's No. 4 software services exporter, has been battling for survival since Raju resigned as chairman earlier this month, revealing profits had been falsified for years and that $1 billion of cash on the books did not exist.

Investigators looking into the fraud have found a maze of about 300 companies related to Raju that were used to siphon as much as $1 billion in cash from Satyam, the report said, citing a senior official involved in the inquiry.

The article said the picture emerging from the investigation of Satyam is very different from the one painted by Raju in a letter to Satyam's board earlier this month.

In the letter, Raju said about $1 billion of Satyam's cash was "non-existent" and that he had falsified its profits for years to avoid losing control of the company. Raju said neither he nor his brother, B Rama Raju, who co-founded Satyam, "took even one rupee/dollar from the company."

The New York Times report, citing the person involved with the investigation, said the entire $1 billion Raju said was faked might have actually been earned by the company but then skimmed from it.

A spokesman for Satyam declined to comment on the report.

The report said Raju's lawyer did not return calls seeking comment.

Source : ibn

[VelMurugan]

Satyam saga: If Raju lying then where's the money?

New Delhi: Former Satyam chairman Ramalinga Raju's claim of having cooked up an imaginary Rs 7,000 crore does not have too many takers.

Sources at the Serious Fraud Investigation Office (SFIO), which is probing the case have told CNN-IBN that the money may have been diverted to other companies owned by Raju. SFIO also has copies of Satyam's bank certificates that the CID seized.

Sources at the Registrar of Companies also tell CNN-IBN that the figures mentioned by Raju in his letter of confession do not tally with the figures in Satyam's second quarter results submitted to SEBI.

Raju mentioned that he had injected Rs 1,230 crore in the company but it is not reflected in the accounts.

The cash and bank balances, revenue and operating margins mentioned by Raju in the letter also did not match with the second quarter balance sheet.

Seized records show over Rs 3,300 crore in fixed deposits with banks like Citibank, BNP Paribas, HSBC and HDFC Bank.

So where did the money go? CID investigators have pointed at diversion of funds into several benami companies put together by the Rajus. Meanwhile, Corporate Affairs Minister PC Gupta spoke about the nexus between Satyam and the two Maytas companies.

"There seems to be a nexus between Satyam and Maytas Prop & Maytas Infra. SFIO has been asked to probe books of Maytas Prop and Maytas Infra," Gupta said.

The Directorate of Revenue Intelligence has also started investigating foreign exchange dealings of Satyam.

The story to watch out for now is about the 250 benami companies that Raju used in this web of fraud and who all benefitted from it. Did this include politicians and bureaucrats? What this space for more.

(With inputs from Shaikh Ahmed Ali in Hyderabad and Sidharth Zarabi in New Delhi)

Source : ibn

[VelMurugan]

The inside story of how Satyam scam unfolded

New Delhi/Hyderabad: The Serious Fraud Investigation Office will probe also Maytas infrastructure as part of the Satyam financial scam probe.

Corporate affairs minister P C Gupta said on Monday evening that initial investigations suggest a clear nexus between Satyam, Maytas properties and Maytas infrastructure

Earlier, the Andhra High Court dismissed Ramalinga Raju's revision petition against his police custody. But SEBI still did not get to question Raju on Monday as a court order on the body's petition to question him was postponed till January 22.

Meanwhile the CID is questioning the Raju brothers and former Satyam CFO Vadlamani Srinivas .

They are also looking into their e-mails and phone records over the last one month.

Meanwhile, Andhra chief minister Y S R Reddy reiterated his government did not flout any rule in awarding the Hyderabad metro rail project to Maytas.

But how deep and how wide is the rot inside India's fourth largest software company?

Sources tell CNN-IBN the company is facing serious money crunch, and needs Rs 1,110 crore to tide over the crisis and Rs 500 crore to pay the January salary to employees.

Meanwhile a search is also on for a new CEO for the embattled IT firm. Network-18 learns that the board is looking at a 10-day time period to pick someone to head the company. Over 40 applications have come in so far.

There is now also a question mark on the number of employees Satyam has. It is reported that Satyam has 53,000 employees.

How they did it

Investigators are now reportedly coming across evidence of insider trading by the promoters even before the scandal broke.

The big takeaway from the Registrar of Companies report is that the top management of Satyam - the directors and senior officials - sold shares ahead of the Big Bang revelation by Raju.

The reports say Satyam books have been overstated by Rs 5,000 to Rs 6,000 crore, leading to an inflated stock price that helped the top management make money.

Who sold what?

Raju has claimed that no one else in the company was privy to the fudging of accounts. But exclusive information with CNN-IBN suggests insider trading.

BSE figures show a number of senior people in the company, including Raju and CFO Vadlamani were reportedly selling Satyam's shares over the last 22 quarters.

In June 2001, Raju had nearly 23 per cent shares. By December that year, his share was down to 22.4 per cent.

In September 2002, it fell to 21.6 per cent which fell a year later to just over 19 per cent.

In 2004, Raju's holding was 16 per cent which fell to 14 per cent in 2005, 11 per cent in 2006. In 2007 it was in single digit.

By September 2008 Raju's share was just 8.27 per cent.

BSE figure also show Vadlamani sold 92,538 shares while the then CEO Ram Mynampati sold 700,000 shares plus 2,50,000 ADRs.

Apart from these, other senior officials also reportedly sold large number of shares. Sources say they include one Kiran Cavale who reportedly sold 400,000 shares and 10,000 ADRs and one Rajan Nagarajan who reportedly sold 430,000 shares and 70,000 ADRs.

Source : ibn

[VelMurugan]

Satyam may have inflated employee count: Report

Mumbai: Satyam Computer Services Ltd may have up to a fifth fewer staff than the Indian outsourcing company has said it has, the Economic Times said on Tuesday, citing an unnamed source familiar with a fraud probe.

The newspaper said the Serious Frauds Investigation Office believes Satyam's headcount could have been inflated by 15-20 per cent to siphon off money as salary payments to non-existent employees.

"Since a major chunk of the costs were actually salaries, a minor distortion in the number of employees could change the personnel expenses significantly," the paper quoted the source as saying.

Asked to comment on the report, a Satyam spokeswoman said: "We believe the numbers are accurate at this point of time."

The Economic Times also said engineering and construction firm Larsen & Toubro had appointed Japan's Nomura to advise it on a possible deal with Satyam, in which it already has a stake of about four per cent.

A spokesman for Larsen said the company does not comment on market speculation.

The newspaper also said unlisted Aegis, part of India's Essar Group, was interested in buying Satyam's business process outsourcing (BPO) business.

"As a group, we constantly look at opportunities in sectors where we are. We would not like to comment on specific proposals," an Essar spokesman said.

Manpower expenses constitute more than 60 per cent of total costs at Satyam, and investigators say the ratio of manpower cost to revenue has remained constant over the past three years despite an increase in the number of employees, the Economic Times said.

The company's website says it had close to 53,000 staff, including those in subsidiaries and joint ventures as at end-September, and it has since said that around 2,000 staff have left.

Satyam, India's No.4 software services exporter, was plunged into crisis after founder Ramalinga Raju resigned as chairman earlier this month, revealing profits had been falsified for years and $1 billion of cash on the books did not exist.

Source : ibn