[finneyp]

Satyam fraud is getting more murkier, FDs & Staff count are fudged, employee strength is 40,000 against the claimed 53,000.

More here: Satyam fudged FDs, has 40,000 employees: Public prosecutor-India Business-Business-The Times of India

[Jedi.Knight]

Ad in Bangalore Times today. Found it in extreamly bad taste.

[appuchan]

Originally Posted by finneyp

Satyam fraud is getting more murkier, FDs & Staff count are fudged, employee strength is 40,000 against the claimed 53,000.

More here: Satyam fudged FDs, has 40,000 employees: Public prosecutor-India Business-Business-The Times of India

And the rest of the salary accounts were probably proxies for politicos and other similar elements in the bureaucracy. That way he has institutionalized bribery and even paid tax for it! Wow...

[Steeroid]

So the revenues are fudged, assets are fudged, liabilities are fudged, cash balances are fudged, headcounts are fudged and I suppose the client list is fudged too.

What is 'Satyam' about this company, then? Should've been called 'Maya'.

[prince_pervez]

Originally Posted by given2fly

What if you appear for an Oracle DBA interview whereas you have worked all your life on Sybase/MySQL Dev and your TL or someone else puts you on mute and tells you the answers and you relay that to client. You get selected and are underutilized whereas someone else is hauled like a mule. Now that is a very common practice and since the client is sitting in a different country and is tele-interviewing the resource, no one comes to know of the fruad.

Similarly, even if client does visit these BPOs, they do something in backend to showcase only the brightest and put them in some shift when the client won't like to visit the premises. One week of adjustment and then back to the order, and you have retained the project/process. It happens a lot my friend, not one but many small to medium and some big IT companies with shady people at the helm.

@given2fly, I am really not focussing on the loop holes in the outsourcing jig, rather on what aware/smart customers apply to their businesses.

Firstly, what I have seen and worked with, clients choose resources which will best suit their requirements and will be productive in the 8-9 hours a day they are going to be billed.

Next, if by exploiting the loop holes, if some resources are under utilized then the productivity metrices go for a toss and the quaterly review report lands in yellows, oranges and reds everywhere. Now if that happens on a regular basis + some other factors, boom, those resources are out of the project, and still if this continues then the project lands in the lap of the nearest competitor.

In a nutshell, they know or would want to whether or not their dollars per hour are being utilized effectively.
I have even worked for a different business process for the same client when I had no load. What I am saying that a customer knows or should now how to streamline their resouces at offshore for productivity purposes.
Why am I getting a feeling that these measures are adopted by consulting firms charging a higher billing rate ?

[srishiva]

Originally Posted by appuchan

And the rest of the salary accounts were probably proxies for politicos and other similar elements in the bureaucracy. That way he has institutionalized bribery and even paid tax for it! Wow...

Tax was deducted at source for these but no IT return was filed? I don't see what the advantage is to show more employees.

[sgiitk]

As per the ET there were 10,000 fake employees on the rolls.

Satyam fudged FDs, has 40,000 employees: Public prosecutor- Software-Infotech-The Economic Times

[appuchan]

Originally Posted by srishiva

Tax was deducted at source for these but no IT return was filed? I don't see what the advantage is to show more employees.

Who will file IT return? And I don't think the amount "deducted" as TDS would have been paid to IT dept as well. But Satyam as a company has paid tax to the govt for the business as reported by them, which was clearly inflated.

Advantage of showing more employees is pretty clear. Divert funds in the name of salaries. Since the income from IT business is supposed to be fully accounted, its not easy to divert them through other means.

In fact, the profit margin would be actually much better than 3% he reported in his letter, if this diversion was not there. 13000 employees translate to approximately 60 crore per month just in salary. Other overheads might add up another 40 crores. Totals to 300 cr for a quarter. And he said he inflated the revenue by 600 crore in Q2 to show profit margin above 20%. Effective profit would have gone up by 300 crore if these fake salaries where not paid. And this means the actual profit margin would have been in the range of 12-15% just by accounting for excess salaries paid. In addition, he might have fudged other figures also.

[spadival]

Originally Posted by given2fly

This fake job thing is very much real....
....I heard it for the first time a few weeks back and was astonished and soon the astonishment went away when I came to know that it is a very common practice in Indian ITO orgs.

"You only learn who has been swimming naked when the tide goes out" - Said the wise man from Omaha, Warren Buffet. Well, one swimmer has been caught, there are other fishes out in the sea. Now that the recession is sinking in, I am sure some more Indian IT companies will be flushed out.

[w 12]

What a mind boggling SCAM ! Scamalinga Raju is releasing something new from his dirty tricks department every day.

10,000 fake employees & no one else in the company knew about it ?

The rot runs much much deeper here. IMO , it will need a large number of accomplices just to open , operate these fake accounts.

Parekh & new board should actually ask every employee to physically collect their pay for the month from their superiors. , to weed out fakes.

[ECM]

Yes and still we see some fans of him try to protect him,sad really sad and can only happens in our society!
I also heard that he used to select or prefer his cast fellows,there are almost 40 Rajus in Satyam HYD's office alone.

What a mind boggling SCAM ! Scamalinga Raju is releasing something new from his dirty tricks department every day.

[anurag_p80]

Originally Posted by ECM

prefer his cast fellows,there are almost 40 Rajus in Satyam HYD's office alone.

Dude, that is a common enough surname around here. And he did not go around recruiting people now, did he. This line of thinking is neither productive, nor relevant.

[prasadee]

Originally Posted by Steeroid

What is 'Satyam' about this company, then? Should've been called 'Maya'.

"Asatyam" would be more appropriate. 13000 ghost employees.
'Satyam has 13,000 ghost employees'

Hard to understand how just one guy could mastermind this. There must be more of these guys... some of them looking for jobs.... better not to hire any upper management guys from Asatyam during these times.

[vivekiny2k]

"Cash reserves" my friend!

where there is cash in India, there are eagles eyeing them.

sometimes it's the eagle, sometimes it's the Raju, sometimes it's both. but the money is taken out thru various holes like these.

Which makes me think, why do these companies cut costs, people's cab expenditures, salaries and everything else just to show profits. They don't give it to the employees, they don't give it to the shareholders. just make a pile and sit on it? some day some eagle is bound to spot it and make a grab, by hook or by crook.

[ajmat]

This question was asked by a journalist when the interim board gave its first press confernece before they were dismissed. Another question yet to be answered is whether Satyam actually owns the buildings where they are located. Might be a family company leasing out at an abnormal rent