Who was fooled and how many documents were faked
We've previously discussed how unlikely it is that Raju Ramalinda could have pulled off the Satyam fraud without help. Frankly, it just didn't seem plausible.
The Economic Times this week posted this tidbit:
According to sources, the fraud involves an amount that is much bigger than the Rs 7,800 crore estimated originally. It could be close to Rs 10,000 crore based on over 7,000 fake invoices and forged documents retrieved by the agency.
Sure, the size of the fraud could be bigger than previously thought (but after Bernie Madoff and the Wall Street bailout numbers what's a little more inflation here) but it's the 7,000 fake invoices and forged documents that really got my attention.
Forging documents takes time and work. Even if Raju did this over a period of time, he must have been a pro at manipulating documents, graphics work, post-stamps, etc. to fool the:
- internal auditors of Satyam
- external auditors of Satyam (I believe that's PriceWaterhouse of India)
- internal accounts payable staff of Satyam
- internal accounts payable Supervisor for Satyam
- internal accounts receivable staff of Satyam
- internal accounts receivalbe Supervisor for Satyam
- internal billing staff for Satyam
- internal billing Supervisor for Satyam
- treasurer of Satyam
- controller of Satyam
- CFO of Satyam
- internal audit committee of Satyam's board
Creating fake documents is an art and maintaining the deception over a long period of time is even tougher. Could one person have pulled all of this off and fooled so many? I seriously doubt it. Perhaps this is why the CBI in India has Raju, his brother and the company's prior CFO under suspicion. But, I suspect others at the executive committee should have known that something was amiss. I just don't understand how a COO, Resource Managers, Head of Human Resources and other executives didn't notice that their headcounts, revenues, etc. did not match what they knew to be the case in the firm.
I suspect there's still a lot more to this story than has emerged and hopefully any new owner of Satyam is going to make sure the prior owners/management are held accountable for past deeds.