CBI probes recruitment process at Satyam

16 Apr 2009, ET Bureau


HYDERABAD: The Central Bureau of Investigation (CBI) has started probing the recruitment process at Satyam Computer Services over the past seven years, even as it validated the software firm’s employee count in its charge-sheet filed in a local court.

Going by the chargesheet, the disgraced founder of Satyam B Ramalinga Raju, his brother B Rama Raju and their chief financial officer Srinivas Vadlamani falsified the loading factor of the employees.

The loading factor refers to the actual number of employees on the rolls of the company who are working on projects that generate revenue. In September 2008, Satyam had reported a loading factor of 75% as against the actual 62% for offshore employees. In technical parlance, it meant that 40% of the employees were on the bench, waiting to be assigned to projects. For onsite employees, the bench staff was around 5%, according to the chargesheet.

Satyam, which has found a new owner, has 48,000 employees on its rolls now.

“Raju was inflating revenues over the last several years. He began aggressive recruitment of employees to justify inflated revenues. The CBI will assess the money that went into paying salaries on over-bloated staff,” said a senior official, who did not wish to be named.

According to him, investors were cheated in the process, as they could have got higher dividends had Raju not carried the baggage. “We will verify each item of expenditure during this phase of investigation to see if money found its way out of Satyam,” the official said.

The chargesheet is based on Raju’s confession statement, besides 432 evidences. The CBI has proof that Raju inflated sales by generating false invoices between April 2003 and December 2008 to meet its guidance issued every quarter.