Preliminary investigations into the dealings of fraud-hit technology outsourcer Satyam Computer Services have revealed that its promoters had forged documents and inflated the headcount of employees to siphon off funds from the company.
According to the newly constituted six-member board, Satyam's founder and former chairman Ramalinga Raju had falsified bank documents relating to fixed deposits of banks like Citibank, HSBC, ICICI Bank, etc.
Some of the papers we have seen, it is obvious, you can make out documents were forged, said Deepak Parekh, a board member.
Meanwhile, a source familiar with the ongoing investigations said that Satyam's CFO Vadlamani Srinivas has confessed that the company had inflated its headcount by at least 15-20 percent to siphon off funds as salary payments.
Since a major chunk of the costs were actually salaries, a minor distortion in the number of employees could change the personnel expenses significantly, financial daily Economic Times cited the unnamed source as saying.
The source said the management had rigged the payroll by inserting names of fictitious employees and diverted large sums of money by pretending to make salary payments to non-existent employees.
As on September 30, 2008, Satyam had 52,865 employees on its payroll, including those in subsidiaries and joint ventures. The company said since September 2008, around 2000 employees have left their jobs. The company needs at least Rs.500 crore per month to meet staff expenses.
Srinivas allegedly confessed to the officials of Criminal Investigation Department (CID) that the inflated number had helped them to withdraw at least Rs.20 crore per month from fictitious salary accounts.
Srinivas claims that the fake jobs were created from 2004 but the CID team is taking no chances and is examining the company's payroll right from 2001.
CID's public prosecutor K. Ajay Kumar said the company had 40,000 employees, as against 53,000 as allegedly maintained by Saytam.
When contacted, a Satyam spokesman refused to comment on the issue.
Satyam's stocks closed 6.67 percent up on the Bombay Stock Exchange on Thursday.