Satyam Fraud is $1 Billion Bigger than Originally Thought

SOURCE: MSNBC

MUMBAI, India – Indian investigators have said the fraud at Satyam Computer Services, once India’s fourth-largest software services firm, was at least $1 billion more than initially thought.

Satyam founder R. Ramalinga Raju confessed in January to inflating company assets by 71.36 billion rupees ($1.54 billion), by exaggerating cash balances, booking fake interest, overstating debt and understating liabilities.

In a 200-page court brief filed Tuesday, India’s Central Bureau of Investigation said Raju had understated the fraud by at least $1 billion.

Raju and his associates got 19.3 billion rupees ($418 million) by pledging their shares at inflated values and generated billions more with a host of other stock scams, the bureau said in a statement.

Investigators also told reporters that Satyam officials created fake customers and fake invoices to inflate revenues by 4.3 billion rupees ($93.1 million) and forged documents to obtain loans and advances worth 12.2 billion rupees ($264.1 million).

Company officials then used their fraudulently acquired funds to buy more than 1,000 properties worth 3.5 billion rupees ($75.8 million), the statement added.

The bureau also brought charges against V.S. Prabhakar Gupta, former head of internal audits at Satyam, bringing to ten the number of accused in what has been billed as India’s largest accounting fraud.

After the company’s collapse, the government engineered a takeover by Tech Mahindra Ltd.

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Satyam shares fell 10.9 percent, to 90.6 rupees a share, Wednesday on the Bombay Stock Exchange. Tech Mahindra shares fell 4.6 percent, to 924.2 rupees a share.