Satyams 13000 ghost employees

Subsequent to my earlier post on the Satyam episode it has been established that Satyam had only 40000 employees and around 13000 employees were fake generating around Rs. 20 crore per month for Mr. Ramalinga Raju! The question is how were these ghost employees created.

The banks follow or are supposed to follow strict KYC norms (Know Your Customer)before opening a bank account. You will understand what I mean if you have ever tried opening a new bank account. The bank requires your Income Tax PAN, your photographs, identity proof as well as residence proof for opening a new account. If 13000 fake employees have been created and the salary was being paid by cheque to these bank accounts implies that a very well thought out fraud was taking place. This fraud would require a lot of agencies being hand in glove to make it successful. The investigators would first need to see whether all the Income Tax PAN numbers created were genuine, if so - whether 13000 different photos, addresses were used to create such ID's. It boggles my imagination to think how so many different photos and addresses could have been generated for opening the account. I suspect that same photos and addresses would have been used for different names.

Once fake PAN's ID's have been created, I am sure someone from the banks were taken into confidence to create the fake employee accounts. Creating 13000 fake accounts cannot be done without the connivance of someone from the bank.

The other issue is Rs. 20cr per month for 13000 employees implies an average salary of Rs. 15384 per employee. Makes me wonder how this money was withdrawn from these accounts - it becomes a full time job for a team of people to ensure that cash is withdrawn or cheques issued so that the money is transferred to designated accounts. This happening over a period of time consistently implies that the banks monitoring personnel were lax and negligent in reporting the fact that money from salary accounts is moving only in a specific manner. One or two persons transferring money to a particular account can be understood - but 13000 accounts!! Either the bank staff is too gullible or was hand in glove in perpetrating the fraud.