Satyam Investigation Report by SEBI



Five years were spent in investigating the stock market aspect of the accounting fraud comitted in the year 2009. It was biggest accounting fraud in the country which gained recognition to the forensic accounting as the profession. Satyam fraud which was exposed in the year 2009 was investigated by SEBI and the 65 pages report was made public.

Full copy of this report is attached with this story.  The comprehensive details pieced together in the report of SEBI confirm some of what is already known but debunks others.
While the report corroborates that Ramalinga Raju had a team working for him to produce fake orders, invoices, receivables, monthly bank statements and fixed deposit receipts to manipulate the financials, the cash perceived to have been swindled by the promoters is not Rs 5,600 crore.

According to SEBI, Ramalinga Raju, chairman, and four others including Rama Raju, managing director, Vadlamani Srinivas, chief financial officer, G Ramakrishna, vice president and  V S Prabhakar Gupta, head of internal audit, were in possession of ‘unpublished price sensitive information’ and profited from sale of shares of Satyam Computer in the open market that were in violation of the SEBI Act of 2003.


IBM Announce Big Data Software to combat fraud

IBM today announced a “Smarter counter fraud” initiative, which is intended to fight crime with new “Big Data” software that will let organizations tap into mobile, social, and Internet data to locate sketchy behavior and stop fraud before it happens.

IBM’s “Big Data” software will pick up  “non-obvious relationships” and links between entities. It uses “enhanced visualization technologies that can identify and connect fraudulent patterns closer to point of operation, and machine learning to help prevent future occurrence based on previous attacks and behaviors.

The new software and services include:

  •  Counter fraud management software: The combination of IBM’s Big Data and analytics capabilities will “help organizations aggregate data from external and internal sources and apply sophisticated analytics to prevent, identify and investigate suspicious activity,” according to the company.
  • The evaluation of an organization’s counter fraud capabilities to improve enterprise-wide protection.
  • The construction of organization models and technology architecture to better detect fraud, and respond and investigate exposures.
  • Custom counter fraud programs that are scalable.
  • IBM’s counter fraud intelligence task force, “Red Cell,” which will research trends, develop strategies and improve the software as new threats emerge.
  • Fraud discovery assets: Customizable assets that use analytics to discover fraud, waste, abuse and errors in systems. These assets focus on medical fraud, insurance claim fraud, tax fraud and occupational fraud.

Family Fare scheme of Air India Hit by Fraud

air india fraudFamily Fare Scheme is the concession given to employees of the airlines in which they can take their family to a domestic destination once a year at subsidized cost.

This concession is found to be misused for the purpose of comitting the fraud in the Government owned Airline company of India – Air India.

The preliminary in-house inquiry conducted by the vigilance department found out that the fraud was largely carried out on the Chennai-Port Blair and Kolkata-Port Blair sector and this caused a loss of Rs 2.70 crore to Air India but the overall loss to the government was over Rs 6 crores.

The probe report said the travel operator “indulged in fraudulently altering the fare on flown coupons to higher amount than the fare shown on the audit coupons and thus presumably keeping the excess amount which is difference of fare as per flight coupons and the audit coupons.”

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