DigitisingThoughts » Crime

On the first anniversary of Ramalinga Raju confession

triplicani — Thu, 07 Jan 2010 04:01:23 +0000

Can you believe it?

One year has rolled over since Mr. Ramalinga Raju made a open confession. To mark the 1st anniversary of the “cook book” confession in which Mr. Raju reported that few thousand crore rupees went missing from the Balance Sheet of the (then) Satyam Computers, I am publishing this humor trial of Mr. Raju.

It’s a big day. The courtroom is packed. With journalists, shareholders, programmers & Barkha Dutt. After all, today’s the day when the Satyam Chairman & CEO, B Ramalinga Raju, is in the dock. The judge is looking solemn. The public prosecutor is looking smug. In the background, the national emblem adds gravity to the proceedings. In order to remove any trace of bias, the words “Satyameva Jayate” have been masked so that it reads “eva Jayate”.

Ramalinga Raju has taken the oath and the crowd too has been quietly swearing at him. The public prosecutor purposefully walks up to the witness stand.

Public Prosecutor (gravely courteous) : Would you prefer to remain standing or would you rather sit down?

Ramalinga Raju : Oh, I’ll sit down. This might be a witness stand, but I am a chairman. Heehee.

PP (ignoring the PJ) : You have been accused of serious corporate fraud. Do you plead guilty or not guilty.

RR : Actually, I am golti. But, to answer your question, not guilty. A startled gasp runs through the courtroom.

PP : Not guilty??? Do you actually deny that you falsified the books to show inflated results?

RR : No. No. I admit to that. What I mean to say is that, there was no intention to defraud. I was merely running my company along Web 2.0 lines. Including the accounting. You could call it Accounting 2.0.

PP (looking a bit out of his depth) : Er…. Could you elaborate.

RR : You see, the buzz-phrase these days is the social web. Where the power of crowds is used to create and refine content. That is Web 2.0. So, with my Accounting 2.0, I was being social, not anti-social.

PP (sarcastically) : Thanks for the tutorial. But what does this have to do with Satyam?

RR : My company had enough of writing programs, providing services and shopping bodies. So I decided to move with the times.

PP : And how exactly is declaring false revenues, “moving with the times”?

RR : In the early part of my life, I had been a hard-working entrepreneur who used to slog to get revenues. But I decided to have an easier, better SecondLife. So my revenues were just an experiment in Virtual Reality.

PP : Hmm, interesting. And does that justify cooking the books?

RR : Well, I did cook them in such a way that they were deli.co.us. And people were ready to Digg in. As long as my books are popular, who cares if some critics like SEBI object. In fact, the Satyam books were bestsellers in the fiction section of Amazon. You could call it Long Tale Economics.

PP : But your balance sheet was blatantly false.

RR (dreamily) : What is true? What is false? That is so 1.0. In today’s world, truth is what the crowd says it is. Constantly shifting but eternally true. My books, you see, were a Wiki.

PP (thunders) : Sir, I think you are just hiding behind a façade of self righteous philosophy. Didn’t you effectively loot the public?

RR : Sure I did. In fact, I’m proud to say that I’m a Flickr.

PP : You know, just for that admission, I can throw the book at you.

RR : And I will face it. I have spent a lot of time in Facebook. Look, you can’t do much to me. I have a great social network. My status has been constantly updated. Higher and higher.

PP (bemused) : But if you were held in such high regard, why get into this mess?

RR : Well, people were always poking me. So I decided to poke them all back.

PP : All this is fine. What I don’t understand is how your auditors never caught on.

RR (mockingly) : What, that PWC crowd? I knew they wouldn’t StumbleUpon anything. They are just a bunch of Tweets. The crowd twitters in mirth

PP : So do you really expect to get away in spite of all that you have done.

RR : Oh No. The health minister can have me banned because with all this 2.0 stuff, I have spread a social disease. Everybody in this room has it. It’s called SIFYlis.

Pandemonium breaks out in the courtroom. The judge bangs his gavel for order. Case adjourned. The spectators quietly disperse avoiding contact with one another.

Disclaimer : All characters in this trial are as fictitious as Satyam’s profits

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Investigators reveal Satyam Fraud methodology

triplicani — Thu, 30 Apr 2009 14:53:28 +0000

In my post dated 7 Jan 2009 titled “Satyam Fraud – Unravelling the Mystery” I had hazarded some guesses on the various ways how the fraud could have been committed and how the auditors could have unearthed such frauds.

Now, the Indian Investigators have revealed the modus operandi of the fraud (inflating revenues). Read below.

Indian investigators disclose how computer systems were subverted to generate false invoices

The Central Bureau of Investigation (CBI) of India has revealed details of the fake invoicing system used by Satyam Computer Services Ltd as part of the US$1 billion-plus fraud that has rocked the company.

Documents released to the general public in India showed how the company’s standard billing systems were subverted to generate ‘false invoices to show inflated sales,’ before its former boss Ramalinga Raju admitted his role in India’s largest ever corporate scandal.

The CBI said it had used cyberforensics to uncover how in-house computer systems were exploited to generate fake invoices.

Regular Satyam bills were created by a computer application called ‘Operational Real Time Management (OPTIMA)’, which creates and maintains information on company projects.
The ‘Satyam Project Repository (SRP)’ system then generates project IDs; there is also an ‘Ontime’ application for entering the hours worked by Satyam employees; and a ‘Project Bill Management System (PBMS)’ for billing. An ‘Invoice Management System (IMS)’ generated the final invoices.

CBI officers have concluded that the scandal involved this system structure being bypassed by the abuse of an emergency ‘Excel Porting’ system, which allows ‘invoices [to] be generated directly in IMS…by porting the data into the IMS.’ This system was subverted by the creation of a user ID called ‘Super User’ with ‘the power to hide/unhide the invoices generated in IMS’.

By ‘logging in a Super User, the accused were hiding some of the invoices that were generated through Excel Porting. Once an invoice is hidden the same will not be visible to the other divisions within the company but will only be visible to the [company’s finance division sales team]‘ concluded the CBI.

The CBI said their inquiries revealed there are 7,561 invoices found hidden in the invoice management system, worth INDRupees 51 billion (US$1.01 billion).

As a result, ‘concerned business circles’ would not be aware of the invoices, which were ‘also not dispatched to the customers’. The note added: ‘Investigation revealed that all the invoices that were hidden using the Super User ID in the IMS server were found to be false and fabricated.’ The value of these fake invoices ‘were shown as receivables in the books of accounts of [Satyam] thereby dishonestly inflating the revenues of the company.’

And there were a lot of these bills. The CBI said their inquiries revealed there are 7,561 invoices found hidden in the invoice management system, worth INDRupees 51 billion (US$1.01 billion). ‘As a result of this analysis, the individuals who have generated and hidden these false and fabricated invoices have been identified,’ said the law enforcement agency.

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Satyam has value left

triplicani — Wed, 15 Apr 2009 14:41:58 +0000

There is no value left in Satyam!

That is what I wrote on 8 Jan 2009, one day after the startling revelations made by Mr. Ramalinga Raju about the accounting fraud committed by him over many years.

However, the Government appointed directors have succeeded in infusing confidence with various stakeholders of the Company in the past three and half months culminating in Tech Mahindra emerging as the Company taking over the operations of Satyam Computers at Rs.58/- per share, each having a face value of Rs.2/-.

Presumably Tech Mahindra is seeing value in the existing businesses, clients and associates of Satyam and is taking a calculated risk on the till now unknown depth of the accounting frauds – most likely ignoring them as past. It is a brave decision for Tech Mahindra to buy out Satyam and is good for all the stake holders of the beleaguered Company.

The fact that a corporate house has found reasonable value in Satyam as a business entity has proved my original theory wrong, I have no shame in admitting that I was wrong.

However, it remains to be seen how Tech Mahindra takes this business forward and hopefully this will not become a drag on Tech Mahindra’s own resources or jeopardize the interests of its own stake holders. I will wait and watch!

I take this opportunity to congratulate the Indian Government (Ministry of Corporate Affairs and Ministry of Finance) and the special directors for the methodical rescue work.

I especially feel proud that the Indian Government saved this Company (and its 40K plus employees and their families) from going down under without parting with public money in the form of Government subsidies or grants.

This will also instill some confidence amongst the procurers of Indian IT services.

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Now world has to act against Pakistan

triplicani — Tue, 03 Mar 2009 07:35:33 +0000

India has been crying from the rooftop that Pakistan has been a breeding ground for terrorists like stagnant water breeds mosquitoes.

The 26/11 terror strike investigations threw up undeniable evidences that the terrorists who indulged in that cowardice act of killing innocent people was planned and perpetrated by Pakistan based terror groups.

Despite all the clinching evidences that included confessions from a terrorist caught alive, Pakistan continued to remain in a denial mode, not accepting that very fertile training grounds exist in their country.

Acceptance of a problem will lead to taking remedial actions. Denial of a problem is equal to turning a blind eye to the issue which in turn growing the problem bigger. The problem might even grow to the level that there could be no solution. Like an unattended chronic disease that only leads to death.

The striking similarities of the terrorists that engaged in the 26/11 Mumbai terror attack and this attack on Sri Lankan cricketers in Lahore proves that more and more poor Pakistani youngsters are brainwashed into terror in the name of religion.

This incident also shows the inaction of the Pakistan government in the last three months. Is there so much intelligence failure in Pakistan that terrorists armed with Kalashnikov and rocket launchers can just walk into a crowded place and fire at a supposedly security beefed up area? How these terrorists got away from the scene of attack?

Read what the Punjab Governor has told CNN-IBN:

The gunmen who attacked the Sri Lankan team in Lahore on Tuesday morning were highly trained and the attack was a “Mumbai-like operation”, said Punjab Governor Salman Taseer. “They are the same people who attacked Mumbai. It’s a Mumbai-like operation. These were trained killers and are not ordinary criminals,” said Taseer as he inspected the area where the Sri Lankan team was attacked. “This is a planned terror attack and the attackers used heavy automatic weapons. They were also carrying rocket launchers but luckily it didn’t hit the target. We have recovered some bags and their car,” said Taseer.

Though there have been many terror strikes in the past, there have never been terror attacks on sports people. Hence this particular incident shocks me no ends. Australia, England, South Africa and recently India had refused to tour Pakistan exactly fearing these kind of attacks. That Sri Lanka was courageous and as a goodwill gesture sent its team to Pakistan should have at least made the Pakistani Government use all available intelligence inputs to prevent untoward incidents. Pakistani government has failed miserably on this front.

Thankfully, the attack has not proved fatal to any of the Sri Lankan cricketers and none of them also seem seriously injured to jeopardize their cricketing career. I shudder to think what would have happened if this attack resulted in such an event. What would have happened if the terrorists gained entry into the stadium with rocket launchers, bombs and took some Lankan cricketers as hostages?

We must salute the five Pakistani policeman who died in this terror attack in their effort to save the Sri Lankan cricketers. May their souls rest in peace. Let us hope at least now, Pakistani Government comes out of its denial mode and takes strong forceful action to completely wipe out the terror camps in its soil.

Cricket World shocked by attack on Sri Lankan team

Press Trust Of India

New Delhi: The Board of Control for Cricket in India (BCCI) on Tuesday expressed its sorrow and anguish over the dastardly attack on the Sri Lankan cricket team in Lahore, where six players were injured.

“We pray for the speedy recovery of the injured cricketers, and sympathise with their families and compatriots,” BCCI Secretary N Srinivasan said in a statement issued in New Delhi.

“The BCCI stands alongside Sri Lanka Cricket in this hour of crisis,” he said.

At least six Sri Lankan cricketers were injured when unidentified gunmen opened fire at them killing five police personnel escorting the team to the Gaddafi Stadium for the third day of the second Test.

The injured cricketers include Kumar Sangakkara, Ajantha Mendis and Thilan Samaraweera.

Cricket Australia Chief Executive Officer James Sutherland said his Board was shocked to learn that Sri Lankan team was attacked in Pakistan and hoped for the safety of players following the incident.

“Australian cricket has many friends in Sri Lanka and in Pakistan and we sincerely hope they are all safe after this awful incident,” he said in a statement issued in Melbourne.

“Early reports are unclear but we are deeply saddened to hear reports that security officials in Pakistan have been killed in this attack. We will be seeking to talk to Sri Lankan and Pakistan cricket officials as soon as possible to pass on our condolences,” he said.

He, however, did not comment on the fate of five One-Day International matches and a Twenty20 fixture in late April/May in the Middle East to be played between Australia and Pakistan.

Australia last year refused to tour Pakistan owing to safety concerns which Champions Trophy was also pulled out of that country following opposition from various cricketing nations due to security reasons.

Geo TV Video Grab:

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Satyam – when scam shines some people make hay

triplicani — Thu, 22 Jan 2009 10:50:49 +0000

I had set up an email alert from Google to get automatic notifications on all new developments in the Satyam saga. I am compiling all of them to be posted here in this blog so that anyone who wants to see all those news, blogs and articles in one place can access them from this website.

This post, however, is not about that.

Today I got a news alert that Satyam Inside-out story is being sold by Everest Research Institute for US $ 499. It is a compiled report giving an insight into the fraud. The package also includes an update of the story as it emerges.

I do not know how this report has been compiled. Whether it has original writings or has information culled from the internet, blogs, newspapers and magazines is not known.

If it only has reports produced by the research institute there is nothing wrong in pricing and selling it. What if it contains information cut and pasted from various sources?

Even if a credit has been given to the sources, is it ethically right to earn money out of original work of somebody else?

What is your view? Do you think it is a personal choice of the person/ institution selling it and the person buying it or do you think it is ethically wrong and opportunitic?

Read the entire story here

Tail piece:

While the Indian markets were crashing only one share was trading strong, both yesterday and today. What was that share? Satyam Computers.

The following factors seem to be working positive for the Satyam share price:

a) The experienced new Board that is taking action on a war footing

b) Initial investigations pointing to bogus employee count of nearly 10,000 and thus meaning siphoning of cash (which means the margins on actual business were not 3% but more)

c) Speculated interest from Larsen & Toubro (L & T) which is one of India’s most professionally run companies, in taking over Satyam

Good for the shareholders of Satyam and intelligent speculative investors who have bought the shares when the world was selling.

Read one of the most popular blog posts on Satyam Fraud on the net here