India's Enron SATYAM SCAM collects Rs 2k cr in Jan-Mar

IN JANUARY, when Ram Mynampati took over as interim CEO of Satyam, days after the company’s founder said its cash balance was just a mirage, the future looked bleak for the fraud-hit firm. Soon, a government-appointed board took over. But how exactly the company managed its finances for the past three months has remained something of a mystery. The widely-believed explanation is through loans raised from banks.
    However, documents available with ET show a bigger supplier of the much-needed liquidity was collections. The company met its working capital needs by garnering over Rs 2,000 crore by way of collections while only Rs 300 crore came through loans, according to documents provided by a highly-placed person in the company.
    The total collection in the past three months was nearly Rs 2,066 crore. After accounting for liabilities towards loans and payments, the company has a closing cash balance of Rs 211 crore for the period ended March 31, 2009. The company also repaid loans of Rs 156 crore and met forex losses of Rs 146 crore in this period.
    The new loans sanctioned during the period were Rs 685 crore, of which Rs 300 crore was availed of till March 26, 2009. The banks that provided support to Satyam during the period include Citibank, IDBI Bank and Bank of Baroda. Renegotiations with existing lenders have been concluded, except BNP, which will also be finalised soon.
    “All statutory liabilities of Satyam such as PF (provident fund) and TDS (tax deducted at source) have been paid. Salary payments have been met on time. The board is also drawing up cost-optimisation measures and this will be taken up by the acquirer,” the person said.
    The government dissolved the software firm’s board in January this year, after the company’s founder and former chairman B Ramalinga Raju confessed to fudging the company’s accounts for years to show inflated cash and revenues. Since then, a new board has been appointed to set Satyam’s house in order. Satyam over-statement may be just 20%
“ALMOST 80-85% of the expected receivables have been collected. So, the extent of over-statement of accounts could be in the range of 15-20%,” the person added.
    On the bidder front, he said: “Finally, Tech Mahindra, L&T, Cognizant and Wilbur Ross. There were close to 141 registrations in the first stage, including law firms. Then, 10 submitted EoIs, and Cognizant also submitted one independently. They wanted absolute confidentiality about the bid. We are not sure if they will jointly bid with Wilbur Ross, or bid independently. IBM was never in the race.”
    When contacted Cognizant vice-chairman Lakshmi Narayanan said: “We cannot comment on it, there has been a lot of speculation about this.”
    On the conflict of interest among the board members, as Deepak Parekh was on the board of Tech Mahindra and SB Mainak has interests in L & T, the person said: “There is no conflict of interest. Whenever there is a talk of Tech Mahindra, Deepak Parekh excuses himself and the same goes for Mainak , when there is talk of L&T.” On staff count, he said, the total count, including subsidiaries, is currently 48,000.

 

 

 

 

 

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