The Hindu Business Line : Satyam’s ex-CFO: Auditors did not point out any deficiencies

These are some of the statements reportedly made by Mr Vadlamani Srinivas, the former Chief Financial Officer (CFO) of Satyam Computer Services, on his role in the Rs 7,136-crore financial fraud to investigating agencies today.

On the other hand, Mr Ramalinga Raju, it is said, ‘parroted’ out the points he made in the detailed 5-page statement he sent to the Securities and Exchange Board of India on January 7.

Manipulations

Mr Raju stated that he had inflated revenues of the company for seven successive years, with the idea of getting a higher valuation so as to prevent a hostile takeover. Mr Rama Raju, his brother and CEO, was in the know of these goings on.

The balance sheet was manipulated to show that the company acquired new business. The CFO was also instructed to act on their directions, Mr Raju is learnt to have confessed.

Bail plea

Meanwhile, the trio had to be content, confined to the Chanchalguda Jail, as the bail petition moved by their legal counsel was posted for hearing for January 16. They have been remanded to judicial custody till January 23.

It was also a busy day for the investigating agencies – the Serious Frauds Investigation Office, SEBI, RoC (which is expected to submit a report shortly), and the State CB-CID as they went about collecting vital documents and confessional statements from the directors, auditors and staff.

Mynampati’s role

Mr Ram Mynampati, the former interim CEO and President of Satyam, believed to be in the know of the company affairs, was the focus of the investigating agencies.

The State Police has also sought a seven-day police remand of the three accused to get more evidence on the case. The State Home Minister told newspersons that Mr Ramalinga Raju and his brother had surrendered to the DGP.

Limited role

Acording to the statement of Mr Srinivas, which was submitted by the CID to the Magistrate, he mentioned that his role was limited to quarterly results and due diligence and that auditors did not point out any deficiencies.

He further stated that he was told to manage operations with cash and was doing so for the past 5-6 years. However, he suspected that something was wrong when payments got delayed.

The former CFO said the management used to hand over the balance sheet a week before the scheduled meetings of the board of directors and he used to discuss the accounts with the statutory auditor just two days before it. He suspected “something wrong” in the company’s accounts because of the delay in payments (to the clients).

Mr Srinivas claimed that he sought the management’s permission to draw money in the fixed deposits to avoid delay in payments to customers, but he was instructed to manage with “the operational cash.”