Mahindra Satyam, which is in the process of restating the accounts of the last few years that preceded the major financial crisis, has reportedly written to the Ministries of Company Affairs and Finance to refund the huge taxes the company had paid on the inflated financial of the company. Sources in the company said the amount could be in the order of Rs 300 crore.
They, however, admitted that it would take some time to get an answer from the Government as there is no clarity on the financial health of the company.
In his January 7, 2009, letter to the Board members, Mr B Ramalinga Raju, the founder Chairman of the then Satyam Computer Services, admitted that the balance sheet, as of September 30, 2008, carried inflated (non-existent) cash and bank balance of Rs 5,040 crore and an accrued (non-existent) interest of Rs 376 crore.
The list also included an understated liability of Rs 1,230 crore and an overstated debtor position of Rs 490 crore (as against Rs 2,651 crore) reflected in the books.
The new management, which has assigned KPMG and Deloitte the task of putting the books in order, has found huge tax outgoes in the last few years on the non-existent finances.
“Even the investigating agencies point out at the inflation of the financials. So when the topline was inflated, it meant that the erstwhile management must have paid huge amount of taxes to justify the numbers,” the sources said.
A company spokesperson, however, refused to comment when approached for clarification on the size of the refunds the company was seeking from the Government.