The new interim management at Satyam (SAY), the Indian outsourcer whose numbers were revealed to be a gigantic lie, says it can survive provided it gets some help with liquidity.
IBN: “We are taking immediate proactive steps to meet up the business, it includes meeting the needs of the customers,” said Ram Mynampatti, interim CEO of Satyam, at a press conference in Hyderabad on Thursday.
“Our top priority to protect careers and livelihoods of employees,” he said. “The thing that bonds us together is the passion, commitment and care. We have 50,000 associates to answer to.”
The company insisted it was still sound but needed “some assistance on liquidity front” to maintain business continuity.
At the very least we can presume that there has been the classic billing/receivables fraud but even a cursory examination of these numbers and their explanation leaves any analyst scratching their heads. What we can say is that therre has to have been collusion at or near the top of the company for this ‘minor problem’ to have exploded.
Digitising Thoughts, a blog written by an Indian Chartered Accountant lays out some of the top of mind issues. I follow the logic and largely agree but I remain perplexed how Raju could have gotten away with it for such a long period of time. Our blogging friend also asserts that his experience of Indian audits are that they are conducted to the highest standards and therefore, the auditors must have been duped. While I am sure such statements are made in good faith, the amounts involved are just too big to have been missed by even the most cursory examination.
The unverified conspiracy theory offered by various commenters is that the old numbers were the real ones, but that cash was embezzled to other companies owned by management. That would explain the gigantic auditor miss, and also clarify the fishy, low-margin numbers not at all in line with the company’s peers.