This New Year has opened with a bang. Mr Raju of Satyam has given Hollywood and Bollywood a wonderful script, has given Media with loads of fodder for them to conduct debates and discussions and special programs,has given People like us material to discuss during lunch breaks, has given Employees with Uncertainity,fear and finally has given Investors, the best possible shock.




It has been an amazing story to say the least.Enough and more has been written about in the media. Hence i refrain myself from presenting the numbers again. But i would like to put forward just a doubt that is just killing me.




Mr.Raju says that he has been fudging the accounts to keep the company going and neither he nor his family members have taken a rupee nor derived any benefit out of this fudging process. Ok let us assume this to be true for a minute.




My doubt is that, the company has been and it is still doing the business of providing IT service. The company's workforce is around 50k. The company derives its revenues by billing the clients who are mostly Fortune 500 companies. The billing rates of the company are almost on par with most of the other IT Majors like Infosys, Wipro and TCS. This means that money has been flowing into the coffers of the company.




Now lets look at the expenditure side, the company is half as big as Infosys technologies Ltd, which pays twice as much as employers as Satyam does. Now looking at the Remuneration which Satyam pays to its employees, it is again on par with Industry majors.




Hence based on the aforementioned points we can safely conclude that Satyam has and must have got enough money to keep the cog moving. So the claim of Mr. Raju that he has brought in 1300 crores of his own money to keep the company moving is baffling to say the least. What has happened to the money which the clients must have paid Satyam?




Now let me give my version of what could have happened. Mr.Raju must have siphoned off the money to fund his real estate purchase and other purchases. He must have pledged his shares and obtained money for those activities. As long as the share price remained high and the prices of real estate was moving up he must have been a happy man. Once the Share Price of Satyam started to fall he must have been worried as his borrowing capacity was decided by the price of the Share.




His statement that All his efforts such as dividends and bonuses must have been to infuse confidence in the Investors was to make sure that his borrowing capacity remained intact. Global recession played spoil sport and it took down the price of real estate and the Sensex down.




This meant that he could not sell off the real estate holdings to bring back the money which he has siphoned off and he could not borrow any more and in fact on the contrary needed to pay the lenders for the drop in the share price. Our man was struck in catch 22 situation and then came out with a master plan to purchase stakes in Maytas using Cash that was not there. Had it gone through he would have made Maytas poor but carried on with the game, unfortunately it failed and he decided rather was forced to confess.





Readers let me know if u feel otherwise :)





Mr.Raju has come out with the Joke of 2009 so early in the year when he said that "None of the Board of Directors knew about what was going on in the company"





P.S: Why didn't SEBI remove the Satyam counter from F&O segment? The removal would have meant Satyam could not have fallen by more than 10-20% max in a day. This fall has wiped out millions of Rupees, all of which belong to the average Indian. While I do understand that exit routes needed to be provided for Investors, I believe in this case a freezing at least on temporary basis until the situation was brought under control would have definitely helped the common Investor.