Satyam fraud: Sebi digs out mismatch worth over Rs 12,000 cr

The Satyam saga, which rattled India over five-and-a-half years ago as its biggest corporate fraud, has turned out to be a case of financial mis-statements to the tune of approximately Rs 12,320 crore, as per Sebi's probe.

Sebi today ordered disgorgement of Rs 1,849 crore worth unlawful gains and another close to Rs 1,200 crore as interest from B Ramalinga Raju, the founder-Chairman, and four other top executives of erstwhile Satyam Computer, which was then known as the fourth largest IT firm in the country.

These gains were made by Raju, along with his family members and other accomplices, by selling or pledging the company shares at inflated prices, which in turn was done by over-statement of bank balances, creation of fake customers, over-statement of revenues and under-statement of liabilities.

At the same time, the company books were also manipulated by non-inclusion of certain receipts and payments, resulting into overall mis-statement to the tune of Rs 12,318 crore, shows an analysis of probe findings disclosed in Sebi's 65-page order published today.

Among others, the probe also found as many as 7,561 fake bills which were even detected in the company's internal audit reports and were furnished by one single executive.

Merely through these fake invoices, the company's revenue got over-stated by Rs 4,783 crore over a period of 5-6 years.

Among other glaring findings of the over five-and-a-half-years-long probe, fictitious invoices were also created to show fake debtors on the Satyam books to the tune of up to Rs 500 crore.

Besides, bank balances were inflated by about Rs 1,732 crore and fixed deposits by Rs 3,308 crore. Fake interest receipts worth Rs 376 crore were also shown on books.

The accounts were also mis-stated by not including receipts to the extent of Rs 1,425 crore and payments worth Rs 195 crore.

Huge mismatches were also found in the TDS (tax deducted at source) amounts shown in the audited balance sheets and that in the income tax returns.

On the other hand, the company promoters and top executives made unlawful gains by sale of shares at prices inflated by 'over-stated' financial position of the company.

The total unlawful gains made by Raju and four others has been calculated at about Rs 1,849 crore, of which Sebi today ordered disgorgement within 45 days along with 12 per cent interest per annum. As of today, the interest component, which has been ordered to be effective from January 7, 2009 -- the day Satyam scam came to light, amounts to about Rs 1,200 crore -- taking the total amount payable to over Rs 3,000 crore.

Soon after the scam was unearthed, the government had stepped in and ordered an auction for sale of the company and it was eventually acquired by Tech Mahindra and later got merged with it.