The Satyam shocker continues…
After all its not all what it seems it is. Even though Ramalinga Raju tried to put up an innocent face in the resignation drama and has tried to take all the blame himeslf, it doesnt still seem to add up. Its always been suspected that Raju was never interested in the IT field and Satyam was just a facade for him to rake in easy money which he could funnel into his other businesses in textiles and real estate.
With earnings in dollars from the software business, it was easy for Raju to divert the money to other businesses that his family was handling. Meanwhile, the government has ordered investigation into all the companies under the satyam umbrella. They are
Nitor Global Solutions
CA Satyam AS
Satyam Venture Engineering Services
What’s more baffling is that the Hyderabad police is still waiting for someone to lodge a FIR against Raju before they can arrest him. Its a known fact that Ramalinga Raju has his contacts in all the top places in politics. His closeness to Chandra Babu Naidu and the current CM of Andhra Pradesh, YS Rajasekhar Reddy is well known. Is that the reason why the police is apprehensive about arresting Raju fully knowing that they might step on the toes of some very powerful people?
As for the most funniest news yesterday, it seems the Crime Branch – Criminal Investigative Department (CB-CID) wing of the Hyderabad police has no idea of how to investigate an economic crime. So, they are willing to let the Central Bureau of Investigation (CBI) handle this. The CBI has a wing that is completely dedicated to investigate such crimes. So much for law enforcement.
Here’s the catch: A 3% margin — which is what Raju said Satyam had actually made — is ridiculously low in the IT industry. Forget Infosys, which made 33% in the same quarter, all IT firms of similar or even smaller size make between 20% and 30%. There’s no way Satyam, which services 185 Fortune 500 firms, could have such a low profit margin, said every analyst we spoke to. What’s more, even people in Satyam dont believe Raju. TOI, in its Thursday edition, quoted a Satyam staffer saying, “His letter implies that we worked at a margin of 3%. That’s pure unadulterated crap.”
So, if Satyam was operating on a much higher margin, why would Raju choose to say it was actually much lower? The implication is that more money was coming into the company in the form of higher profit, but it was being siphoned out.
It’s a crime to show money in the books where none existed, which is what Raju said he did. But it’s a worse crime to take out money that actually did exist. There’s speculation that Raju was doing so in order to invest in other businesses such as real estate, and did intend to put it back in Satyam at some point of time, but possibly got into such a jam that he couldnt replenish the company’s coffers.
The 3% margin question was put to the interim CEO Ram Mynampati at a press conference in Hyderabad on Thursday. He side-stepped the question.
Read the rest of the article here that indicates that Raju might not have been only responsible for inflating the cash in the books, but was in fact stealing the money made by Satyam and funnelling them into other businesses headed by members of his family.
If the above mentioned accusation can be proved by the law enforcement agencies, Ramalinga Raju is in for some serious trouble. But like with every other offence that has occurred in our country, iam very pessimistic about Raju getting his just desserts. He might just walk off the hook and the lakhs of shareholders will be left clutching at the straws. As for the supposedly 53,000 employees in Satyam, is it true that they really have so many employees? Or was it another spin of the great crook called Ramalinga Raju?
Above cartoon from : Twenty22