According to CBI, the Rajus made Rs2743 crore from share sale alone besides buying 935 properties adding up to 5,757 acres valued at Rs3,455 crore

Fraudulent sales, inflated invoices, accrued interest and understated liabilities were some of the major methods that Ramalinga Raju and his henchmen used in order to make Satyam Computers Services Ltd appear highly profitable and keep the share price high, so that he could take away a whopping Rs2,743 crore out of the company. The Central Bureau of Investigation (CBI) explained this and other intricacies of its investigation into Satyam at a media workshop in Mumbai.
 
According to the CBI, Satyam's promoters held a mere 2.18% stake in the company at the time of its collapse in December 2008, as compared to the 18.78% share holding in 1991. The Rajus realized Rs767.73 crore through sale of shares and another Rs1,951.46 crore by pledging their holding. Lenders sold large chunks of these shares when the market turned turbulent and Mr Raju could not meet margin calls. Yet, the biggest beneficiaries of keeping the share price at an abnormal high. CBI estimates that the Rajus made Rs2,743 crore from Satyam shares alone -  Rs767 crore from selling their shares, Rs1,951 crore raised by pledging shares and Rs25.80 crore earned as dividend income. As the CBI pointed out, the company announced hefty dividends when it was aware that the revenues were fake and the company had no business declaring a dividend at all. This gave the Rajus an illegal dividend income.
 
The money earned was used to purchase 6,000 acres of land through 327 companies, floated to circumvent the Land Ceiling Act. Some land was also purchased in the names of close relatives. CBI estimates that the Rajus acquired 935 properties adding up to 5,757 acres and valued at Rs3,455 crore. 
 
JL Negi, general manager, Reserve Bank of India (RBI), on deputation to the CBI explained how Ramalinga Raju falsified facts and puffed up results. He said, the company benchmarked its performance to that of Infosys. The financial numbers were massaged through fraudulent sales- invoices generated through "Excel porting", which allowed the founder of Satyam and his co-conspirators to raise invoices bypassing the regular system and obfuscating an audit trail. In the period from April 2003 to December 2008, 7,561 fake invoices were created by a set of people close to Raju, who had access to the system. The fake invoices generated without purchase orders were shown as "hidden" and could only be accessed by a chosen core group. The CBI alleges that Mr Raju even asked his software team to develop certain products for seven non-existent customers.

These were Mobitel, Cellnet, E-care, Synony, Northsea, Autotech and Hargreaves. Fake revenue was recognized for these products by generating fictitious email as if they originated from these customers.  A domain was created in rediffmail to send these emails and 63 invoices were generated to raise Rs430.66 crore. The company even booked Rs31.18 crore as forex profit on account of fictitious sales.
 
In addition, it claimed accrued interest of Rs376 crore, understated liability of Rs1,230 crore and overstated the debtors position by Rs490 crore to show high operating margin of 24% against the actual margin of 3%. As is now well known, the aborted Maytas acquisition deal was a last ditch attempt to paper over the fictitious assets with real ones in the merger process. The company also took short-term loans and advances from banks and Institutions such as HDFC, HSBC, Citi Bank, BNP Paribas, ICICI Bank, Fincity/Higrace and Elem Investments Pvt Ltd during the period between 2000 and 2008 on the basis of false and fabricated board resolutions and majority of the loans were not shown in the books. The CBI also claims that Satyam paid interest of Rs37.62 crore and availed of a Rs1,493.84 crore loan from banks which is not accounted in the books. However, an equivalent amount was shown as amount being transferred from the accounts maintained at BoB, New York. The fictitious sales were reported as realized and shown as deposited in the account of the company maintained with BoB, New York.

The company had accounts with 36 banks in India and seven banks overseas. The cash and bank balances shown in various banks in the form of current account and fixed deposit was Rs5,160.34 crore for the period 2002 to 2008, while actual balances were only Rs139.78 crore. Thus, there was a difference of Rs5,020.55 crore.
 
Satyam also diverted Rs154.40 crore to global networking solutions, Infotech solutions, Alpha software and Tech Consultant Ltd during 1999 to 2002 without account for it.