The biggest corporate scandal in India, Satyam Scandal where the promoter and chairman Ramalinga Raju fudged the accounting inflating assets and understating liabilities manipulating accounts by $1.47 billion (present value is approximately Rs. 9000 Crores).
- Inflating Receivables (Sales) – He raised fake invoices and used an emergency system of feeding the same to the company’s inventory management software thus bypassing validations. He also generated a “Super User” code that enabled him to hide the fake invoices for obvious reasons. CBI said in a statement
Investigations revealed that the accused have already entered 6,603 out of these false and fabricated invoices amounting to Rs 4,746 crore into their books of accounts thereby inflating the revenues of the company to this tune.
- Understated Liability – It amounted to Rs. 1230 Crores.
- Overstating no. of Employees –CID told in court that the actual number of employees is only 40,000 and not 53,000 as reported earlier and that Mr. Raju had been allegedly withdrawing Rs. 20 Crores every month for paying these 13,000 non-existent employees. Read More »