The probe into the Satyam scam has turned the spotlight on banks as investigators and its newly appointed auditors verify the company’s numerous accounts. The government is trying to ascertain how much cash actually exists in Satyam’s accounts, whether the bank certificates presented to auditors were forged, and whether bank employees colluded with company officials.

Satyam has claimed deposits of nearly Rs 180 crore for the year ended March 2008 in international branches of several global banks. These include Banco do Brasil, BNP Paribas, Citibank, Citibank International, China Merchants Bank, Dresdner Bank, HSBC Bank, Kookmin Bank, KSB Bank, Mitsui Sumitomo Bank, UBS, UniCredit Banca, United Bank, Wachovia Bank and Woori Bank.

The company has stated that another Rs 3,308.41 crore had been parked in long-term fixed deposits. Although the break-up of these investments is not available, Satyam has listed Bank of Baroda, BNP Paribas, Citibank, HDFC Bank, HSBC and ICICI Bank as it principal bankers.

When it comes to its current account details with foreign banks, Satyam’s annual report not only lists the opening balance for the financial year against each account held, but also the maximum balance during the year. Interestingly, the company showed a balance of Rs 1,166.89 crore in various current accounts that earn zero interest, which caught the attention of government investigators and regulators. B Ramalinga Raju, former chairman of Satyam, had said that the company had Rs 5,040 crore in non-existent cash and bank balances on its books.

Meanwhile, Satyam’s new board on Wednesday appointed KPMG and Deloitte as its new auditors to assist in the restatement of accounts, while previous bookkeeper Price Waterhouse said its audit of company has now been rendered “unreliable” after Raju’s admission of fraud. According to Deepanker Sanwalka, a partner and national head of forensic services at KPMG, companies often include cheques in hand and remittances in transit to inflate cash balances. Another way is to forge bank statements to show fictitious reconciliation statements, he said.

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