The financial fraud perpetrated by the founders of Satyam Computer Services was executed through a well-planned accounting system that used as many as 7,561 fraudulent invoices worth Rs 5,117 crore (Rs 51.17 billion) to inflate the company's sales, the Central Bureau of Investigation alleged Monday.
Using cyber forensic techniques, the CBI deciphered the modus operandi of the Satyam fraud: that is generating false invoices to show inflated sales by the IT company.
The accused had used an emergency option of feeding invoices directly to the company's inventory management software, which in normal circumstances would be routed and validated through several software systems.
Investigation conducted by the CBI into the Satyam scam revealed that Satyam Computer Services Ltd has got a regular application flow for the generation of invoices.
This regular flow has a series of applications like the Operational Real Time Management for creating and maintaining the projects, the Satyam Project Repository for generating the project ID, an application to key-in the main hours put in by the employees called Ontime, and a Project Bill Management System to generate billing advises from the data received from the Ontime and from the rates agreed upon with the customer.
Based on these billing advises generated by PBMS, the Invoice Management System generates the invoices.
Apart from the regular application flow, Satyam has another method of generating invoices through Excel Porting wherein the invoices can be generated directly in IMS bypassing the regular application flow by porting the data into the IMS.
This application has to be used sparingly for emergency requirements.
Investigation revealed that in order to perpetrate this fraud, the accused surreptitiously got a subroutine incorporated in the source code of the IMS application wherein a new user ID called 'Super User' was created and this Super User had the power to hide/show the invoices generated in IMS.
By logging in as Super User, the accused could hide some invoices that were generated through Excel Porting. Once an invoice is hidden the same could not be visible to other divisions within the company but would only be visible to the sales team in Satyam's finance division.
As a result, the concerned business circles would not be aware that such invoices exist.
These invoices are also not dispatched to the customers. 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.
Investigation further revealed that these false and fabricated invoices were generated for the purpose of inflating the sales and the amounts pertaining to these false and fabricated invoices were shown as receivables in Satyam's books of accounts thereby dishonestly inflating the revenues of the company.
Some 7,561 invoices were found to be hidden in the IMS. These 7,561 invoices are collectively worth Rs 5,117 crore.
It was also revealed that the accused have already entered 6,603 out of these false and fabricated invoices amounting to Rs 4,746 crore (Rs 47.46 billion) into their books of accounts thereby inflating the revenues of the company to this tune.
During the course of the investigation, a detailed analysis of the computer logs pertaining to both the IMS application and the computer network of Satyam were analysed. This analysis was also matched with the Access control swipe card data of the company.
As a result of this analysis, the individuals who have generated and hidden these false and fabricated invoices have been identified. The computer server where these incriminating electronic records were stored has also been identified and the incriminating data was retrieved and the required computer forensic expert's opinions were also obtained.
As a result of this detection, the actual modus operandi as well as the individuals who have perpetrated the fraud have been identified. This will go a long way in unearthing the entire fraud and in the finalisation of the investigation pertaining to the falsification of accounts and forgery of documents by the accused in the Satyam scam.
The bail application of disgraced former chairman of Satyam B Ramalinga Raju, B Ramaraju and V Srinivas was dismissed by the trial court on April 25. Eight persons are in judicial custody including the above three persons.
The CBI has also obtained permission to conduct further investigations into the case pertaining to acquisition of assets by the accused and the diversion of funds.
Source: www.rediff.com
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