The CBI has charged Satyam [ Get Quote ] founder B Ramalinga Raju, his brother B Rama Raju and eight others with creating fictitious customers and siphoning off Rs 430 crore (Rs 4.30 billion) from the IT firm.
According to the supplementary chargesheet filed last month by the CBI, which probed the accounting scam in the company, the accused created fake customers and generated invoices against them in order to inflate revenues of Satyam Computer Services Limited to the tune of Rs 430 crore, incurring expenditure to the tune of Rs 65.88 crore (Rs 658.8 million).
"Adequate evidence has come on record to prove that the accused Rama Raju, SCSL employees G Ramakrishna, D Venkatpathy Raju and Srisailam have dishonestly and fraudulently conspired together to create seven fake customers in 2006 and got forged and fabricated invoices raised in the name of those customers to the tune of Rs 430 crore in order to inflate the revenues of SCSL to that extent," the chargesheet said.
In order to inflate the account books, the accused created fake email IDs and sent mails on behalf of the seven customers to various associates of SCSL and urged them to continue the development of the products.
After an analysis of the emails, it was found out that the Internet Protocol addresses used for sending the mails were from within Hyderabad, clearly revealing the mails had not emanated from the seven foreign customers, the chargesheet said.
The accused availed of loans and advances without the approval of the board of directors by falsifying the accounts of SCSL and suppressed the repayment liabilities, resulting in misappropriation of the funds of SCSL.
"SCSL borrowed the amounts during 2000 to 2008. The loans were availed without requisite authorisation from the board with Rs 530 crore (Rs 5.30 billion) loans from HDFC Bank [ Get Quote ], Rs 185 crore from HSBC Bank, Rs 223.8 crore (Rs 2.238 billion) from Citi Bank, Rs 222. 2 crore Rs 2.222 billion) from Citicorp Finance (India) Ltd, Rs 20 crore (Rs 200 million) from BNP Paribas and Rs 40 crore (Rs 400 million) from ICICI Bank [ Get Quote ]," the charge sheet said.
The CBI further said Raju brothers and V Srinivas resorted to criminal breach of trust and falsified the accounts in the matter pertaining to acquisition of shares of a BPO company M/s Nipuna Services Ltd in 2007, for which Raju brothers and V Srinivas were the directors.
"They borrowed Rs 160 crore (Rs 1.60 billion) from the front companies floated by Raju brothers and kept the board of directors in dark with regard to the source of funds for the purchase of shares of M/s Nipuna and also regarding the fiscal health of M/s Nipuna which otherwise was a loss making company since inception," it said.
The CBI claimed that B Ramalinga Raju, B Rama Raju and Vadlamani Srinivas also deliberately misled the board during the financial years 2007-08 and 2008-09 in the matter pertaining to declaration of dividends when the company was not actually making profits. In the process, they themselves received wrongful dividends to the tune of Rs 25 crore (Rs 250 million) during this period and committed criminal breach of trust by misappropriating the funds of SCSL.