Satyam Computer Services did not act alone when they committed a multibillion-dollar fraud

Satyam Computer Services did not act alone when they committed a multibillion-dollar fraud that left the business struggling for survival: They apparently tapped a team in the company’s finance department to help them, The New York Times’s Heather Timmons writes.Several managers and about 10 junior staff members in the finance department of the company created a paper trail to cover up the fraud, the former chief financial officer told investigators over the weekend.This team fabricated and prepared false documents like sales invoices, bank statements and bank confirmations, the former chief executive, Srinivas Vadlamani, told India’s top accounting body. He said that he also had taken part in the fraud.
Mr. Vadlamani, who is now in jail, said that he had tried several times to resist the instructions to commit the fraud but that he could not because of a “master-servant relationship.”His description indicates that the “scam had occurred owing to a carefully crafted fraud by creating normal trails and backup support documents and records,” the Institute of Chartered Accountants of India said in a statement Monday. The accounting body said it had questioned Mr. Vadlamani in its effort to determine whether Satyam’s auditing firm, PricewaterhouseCoopers, had been involved in the fraud.Two of the global accounting firm’s auditors have been arrested in connection with the Satyam fraud. Neither the auditors nor the company’s independent directors were involved in the fraud, the former chief financial officer told his questioners. The Indian accounting group’s president, Prakash Agarwal, said the interrogation had “vindicated his belief about the credibility of the auditing profession.”In January, B. Ramalinga Raju, the Satyam chairman, shocked Indian markets and his company’s hundreds of global customers when he said he had faked operating margins at the company and falsified its books.At the time, Mr. Raju said he had acted without the knowledge of the company’s board and many top managers. He has been jailed.The former finance chief’s statement comes as the government and a new board are trying to sell a majority stake in Satyam. Several companies are planning to bid for a 51 percent stake.