The ministry of Corporate Affairs is looking into the statement sent by Ramlinga Raju to stock exchanges  admitting fraud in Satyam’s accounts.
“If the message was true and a fraud has happened in Satyam it is very shameful. It should not have happened,” Corporate Affairs inister Premchand Gupta told reporters on Wednesday .

The corporate affairs ministry is in constant touch with market regulator SEBI and since this is a complex issue, the ministry will look into the roles of company directors, company auditors and company secretaries in the fraud, the minsiter said.The ministry might refer the case to Serious Fraud Investigating Office once the message of fraud has been verified. “Once there has been a verification of the fraud, coordinated action will be taken along with the SEBI,” the minister added.

In his statement to stock exchanges, Mr Raju, who resigned as the CEO of Satyam, said, “It is with deep regret and tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice:

1. The Balance Sheet carries as of September 30, 2008, a) Inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 crore reflected in the books); b) An accrued interest of Rs 376 crore, which is non-existent c) An understated liability of Rs 1,230 crore on account of funds arranged by me; d) An overstated debtors’ position of Rs 490 crore (as against Rs 2,651 reflected in the books);

2. For the September quarter(Q2) we reported a revenue of Rs 2,700 crore and an operating margin of Rs 649 crore(24 per cent of revenue) as against the actual revenues of Rs 2,112 crore and an actual operating margin of Rs 61 crore (3 per cent of revenues). This has resulted in artificial cash and bank balances going up by Rs 588 crore in Q2 alone.”

 

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