Ghost workers at Satyam

Written by Vikas Dhoot | Rachana Khanzode | New Delhi, Mumbai | Updated: Jan 23 2009, 07:12am hrs
Just how many people does Satyam Computer Services employ In June 2008, Satyam reported it had 51,643 employees on the rolls. The companys website and government statements after founder & former chairman B Ramalinga Rajus confessions put the number at 53,000. Minister of corporate affairs Premchand Gupta said last Friday that the only way to determine the actual staff strength was through the provident fund office.

According to the public prosecutor arguing the matter in a Hyderabad metropolitan magistrate court on Thursday, the number of employees is 40,000. FE learns that the last time Satyam filed its monthly returns to the Employees Provident Fund Organisation (EPFO), for the month of November 2008, the number of employees stood at 43,622.

For December, EPFO is yet to receive the PF contribution returns from the company, although the law mandates that contributions be deposited by the 15th of the following month. EPFO can levy damages for any delay by a company under Section 14 of the Employees Provident Fund Act of 1952.

Though the government is keen on salvaging Satyam, citing its large number of workers, Guptas ministry is yet to contact the labour ministry or EPFO to ascertain the firms precise staff strength. Analysts and accounting experts have been arguing that the company probably inflated the figure by at least 10,000, as it is a simpler way to siphon off money.

Since the day of Rajus confessions, the Hyderabad PF office has been reportedly flooded with applications and queries from Satyam staff and former employees. The office has a separate Satyam section. Indian National Trade Union Congress President and Rajya Sabha MP from Andhra Pradesh G Sanjeeva Reddy said, If there is a complaint from the workers about EPF money not being paid regularly or withdrawal requests being delayed, we will ask the PF authorities to take stringent action.

For Satyam employees, being in a higher wage bracket, the aggregate monthly PF and pension contribution would add up to a huge sum. There are doubts being raised about the genuineness of the challans submitted to the EPFO, in support of the PF remittances deposited to its notified bank.

Moreover, since Satyam got away by forging fixed deposit certificates from banks such as HDFC Bank, HSBC, BNP Paribas and ICICI Bank as is being alleged, producing fake challans of PF remittances cannot be ruled out, either.

Central PF commissioner K Chandramouli told FE, EPFO will definitely take action if we find that contributions have not been made in accordance with the law, or if employees complain about tampering of accounts. The fallout on employees will come at a subsequent stageif people lose their jobs, they will approach us for withdrawals and then if we find any problems, we will act.

It is also learnt that Satyam had salary account facilities with ICICI Bank, HDFC Bank and Citibank, although it could not be ascertained how many Sataym salary accounts were held by these banks. A spokesperson for ICICI Bank said, ICICI Bank is one of the banks that provided a salary account facility to Satyam employees. The bank is cooperating with the investigating agencies on the issue. Citibank has also confirmed that that Satyam had opened salary accounts for employees with it, although email queries sent to HDFC Bank failed to elicit a response.

The companys annual report for 2007-08 stated that its personnel costs had increased by 36.14% to Rs 5,045.54 crore from Rs 3,706.04 crore in 2006-07. This included salary incentives amounting to Rs 524.01 crore in fiscal 2008, compared with Rs 251.31 crore in fiscal 2007.

Top HR consultants say investigators will have a tough time getting to the bottom of the fudged numbers. There are no norms to verify the numbers presented by any company in terms of employee additions. Therefore, it is going to be challenging for investigators to figure out the actual numbers in Satyam, says E Balaji, CEO, MaFoi Management Consultants, an HR firm.

Interestingly, Raju drew a salary of Rs 60.43 lakh a year, B Rama Raju Rs 44.07 lakh, and Ram Mynampati, totalling a whopping Rs 3.52 crore in 2007-08.