More than 100 days after the government began its multi-pronged damage control exercise over the Satyam Computer Services? accounting fraud, it turns out that at least one central government agency?the Employees? Provident Fund Organisation (EPFO)?could have raise a red flag about the firm?s operations as early as August 2006.
Documents accessed by Fe reveal that Satyam might have submitted forged challans to EPFO as proof of PF contributions for the August and December 2006. The challans indicated that nearly Rs 13.13 crore was deposited with EPFO?s designated banker for each month.
?This is not confirmed in the banker statement,? EPFO has found in January after an internal review of the Satyam group firms? PF accounts. After Satyam founder B Ramalinga Raju confessed to the fraud, it emerged that deposit certificates from top private and foreign banks had been forged as well.
For the PF ?default? of these two months and December 2008, when the failed Maytas buyout pricked the Satyam bubble, the PF authorities have now initiated ?action for assessment of dues.? Taken together, the defaults for these three months add up to Rs 41.74 crore.
Not just that. Ten of the 12 Satyam group firms registered with EPFO?s Hyderabad office haven?t been complying or filing challans with the PF office.
These include Satyam?s joint venture with General Electric, Satyam GE Software Services Ltd (no challans filed since June 2005); Satyam Venture Engineering Services Pvt Ltd (no challans from December 2006); and Satyam BPO (last challan filed in November 2008).
Of the 14 Maytas group firms registered with the Hyderabad PF office, dues against 11 are being scrutinised. Two of these firms, Maytas Global E Services Pvt Ltd and Maytas-NCC (PF Code# AP/51092), haven?t submitted challans from February 2006.
Labour minister Oscar Fernandes told Parliament that of the Rs 14.81 crore PF dues for December, Satyam had ?remitted? the employees? share of Rs 7.73 crore on February 6, the day it got a Rs 600-crore line of credit from LIC of India. The EPF Act of 1952 requires firms to pay PF dues by the 15 th of the following month.
After the dues of each Satyam and Maytas firms are assessed, penal damages will be determined and levied for the delay in payments under section 14 B of the EPF Act.
These dues and penal damages would add up to a substantial sum, a senior PF official reckons.
EPFO?s efforts to recover the current dues were stymied after the Company Law Board granted immunity to the government-appointed Satyam board. Though recovery action may be on hold, past dues would have to be recovered eventually.
The suitors of Satyam Computer Services could be liable to pay the past dues not covered under the Company Law Board. ?Whether the buyer has to pay these past dues would depend on how the firm?s sale takes place. If the company is bought over in entirety, the legal entity would be the same and hence the new shareholders will inherit the PF dues,? a consultant close to the developments told FE.
