Satyam Computer Services is planning to challenge an attachment order issued by Enforcement Directorate (ED) freezing about Rs822 crore in the company’s accounts.
Satyam Computer Services is planning to challenge an attachment order issued by Enforcement Directorate (ED) freezing about `822 crore in the company’s accounts.
The ED had attached the funds as part of its investigation into the accounting scam allegedly purported by Satyam’s founder B Ramalinga Raju.
The agency had said that the funds were a part of the scam proceeds.
Vineet Nayyar, Satyam’s chairman, said there were never any funds left in the company by the earlier management and there was no way the scam proceeds can remain in the company’s accounts.
“That money was already spent by the time we took over the company. In fact, the situation was so bad when the government directors took over the company that they had to immediately borrow Rs450 crore to pay the salaries of the employees. The amount attached by ED is our money and we will contest the attachment,” he said.
Satyam’s new management led by the Mahindras had earlier conducted a forensic audit and had kept aside about Rs1,230 crore in suspense account since the Raju family had later contested that some of the entities of the family had lent about Rs1,230 crore to Satyam, which was never paid back.
On the question of Satyam now owning the funds in those accounts that too after providing for them in a suspense account, C P Gurnani, Satyam’s CEO said the provisioning was made as part of a conservative accounting policy.
“I want to make sure that my shareholders transparently know that I am disputing this amount and I am creating a provision for it.”
Raju was arrested in January 2009 by the Andhra Pradesh police for allegedly committing the accounting fraud and the case was subsequently handled by the Central Bureau of Investigation. Raju along with his brother and the then CFO Vadlamani Srinivas were then arrested and released on bail recently.
The new management, however, has reportedly bailed the company out of the financial mess of sorts and is now preparing to merge the once fourth largest IT service provider with Tech Mahindra. The companies are now awaiting the approvals from the Andhra Pradesh High Court to take the merger forward.
Meanwhile, for the quarter ended September 2012, Satyam reported about Rs1,938 crore in revenue, a growth of about 23% over the year-ago period. The company’s net profit too increased 17% from about `238 crore in the corresponding period to about Rs278 crore in Q2.
Currently, the company’s headcount is 36,787 and the attrition about 13.1%.
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