In what could be early vindication that Satyam Computer Services had been doctoring accounts for some time, three of the company?s six principal bankers in India confirmed to FE they did not hold any long-term fixed deposits of the IT major. Satyam had claimed it had long-term FDs of Rs 3,308.41 crore with Indian banks and subsidiaries of foreign banks in its annual report 2007-08. These were part of its cash balances, which former chairman B Ramalinga Raju acknowledged on January 7 were fictitious.

The revelations show that Satyam was laundering its books for at least two financial years, if not more. This is significant as there had been speculation over whether the disappearance of cash from the company books was a recent development, as late as September 2008.

Satyam?s annual accounts had listed Bank of Baroda, HDFC Bank, ICICI Bank, HSBC, BNP Paribas and Citibank as its principal bankers in India. The major ones, ICICI Bank, HDFC Bank and Bank of Baroda, confirmed to FE they had no or negligible Satyam FDs. These banks also said they did not have any exposure to Satyam stock.

A BNP Paribas spokesperson declined to comment, but Bank of Baroda CMD MD Mallya told FE, ?We do not have any deposits of Satyam, nor do we have any exposure (to it). We have not lent to Satyam. At best, it may have a current account with us.?

In an emailed response, an ICICI Bank spokesperson said, ?ICICI Bank has no fund-based or non-fund based exposure in Satyam Computer Services, other than a marginal exposure of about Rs 3 crore on account of a forward contract. Satyam has a deposit with ICICI Bank in a current account. The balance in this account is not material.?

An HDFC Bank spokesperson said, ?We do not have any direct exposure to Satyam. There are no fixed deposits, and current accounts are certainly not significant,? he said. The bank manages the salary accounts of some Satyam employees and has also disbursed auto loans to a section of them. ?There are a few salary accounts and a few foreign exchange remittances, both of which are insignificant,? he said.

HSBC?s spokesperson said he could share client details with FE, but said the bank would furnish details to investigating authorities. While HSBC and Citibank refused to comment citing client confidentiality, senior officials said these banks mostly had trade receivables accounts of Satyam in India. Citibank is learnt to have already frozen 30 such accounts.

The Rs 3,308.41 crore of Satyam?s purported FDs in banks in India are a major chunk of the non-existent Rs 5,040 crore in cash that Raju confessed to in his letter of January 7. Further, this also confirms that another Rs 376 crore in interest accrued claimed by the company on FDs too is possibly fictitious.

Government officials who have monitored the banking sector closely said negligence of an external auditor looked more probable than collusion with bank officials. ?Normally, it is the duty of the external auditor to get a confirmation from banks on the FDs mentioned and the interest that is derived. Also, they have to check current accounts,? said CM Vasudev, former banking secretary in the ministry of finance.

Satyam showed a balance of Rs 1,166.89 crore in current accounts, although most banks that have Satyam current accounts said the funds were not ?materially significant.? Vasudev said if someone forged a bank certificate using the bank?s letterhead, then obviously the bank could not be faulted. ?Only investigation will reveal if the auditor got the letter from the bank through mail (or email), fax or it was hand-delivered. Finding all these are vital to solving the case,? he said.

Too many cooks?

Sebi?s plan to question disgraced Satyam Computer Services founder & former chairman B Ramalinga Raju has hit a temporary roadblock with a Hyderabad court reserving orders on the separate pleas of the state police and the market regulator to interrogate Raju.

While Sebi?s plea to interrogate Raju, his brother Rama Raju and former CFO Vadlamani Srinivas on buying, selling and dealing in the firm?s shares will now be considered on Monday, this brings into focus the problems that arise when a complex case is being investigated by multiple state and central agencies.

The case has already been handed over to the Serious Fraud Investigation Office by the ministry of company affairs, taking the number of agencies already on the job to six. Apart from the state police, the SFIO and Sebi, the Registrar of Companies has already submitted its findings regarding Companies Act violations by Satyam, but as yet there is no clarity on which agency will lead the complex investigations. The Reserve Bank of India has asked banks to disclose any deposits the firm may have held with them. The Institute of Chartered Accountants of India has initiated a probe into the role of audit firm Price Waterhouse and at the same time said new auditors KPMG does not have a mandate to conduct an audit under Indian laws.