Satyam Computer is not the only Ramalinga Raju family-promoted company that fudged books, but Maytas Infrastructure also seems to have mis-represented its financials.
The difference, however, lies in Satyam over-stating its revenue, cash position and profits, while Maytas Infra under- stated its profit in April-June quarter and the discrepancies were 'duly accounted for' in the company's books later.
While the role of auditors in Satyam fiasco is questionable as of now, it was statutory auditors of Maytas Infra who pointed out the under-statement in its books.
"The statutory auditors of the company in their limited review report for the quarter ended June 30, 2008, qualified that the company made under-provision for service tax liability and excess provision for deferred tax liability, resulting in a net understatement of profit after tax by Rs 1.60 million for the quarter," Maytas Infra's vice chairman B Teja Raju said in the 'notes' attached to its quarterly results filed with the Bombay Stock Exchange.
"The said liabilities have been duly accounted for in the books of account in the current reporting period (quarter ended September 30, 2008), added Teja Raju, who is son of Satyam founder and Chairman B Ramalinga Raju.
Ramalinga Raju announced on Wednesday his resignation as Satyam chairman after disclosing financial irregularities to the tune of close to Rs 7,800 crore (Rs 78 billion) at the company over a period of several years in a development that has emerged as the biggest ever corporate fraud in India.
Raju said that he would have filled the 'fictitious assets' with real ones had he been successful in acquiring Maytas Infra and another family-promoted firm Maytas Properties.
On December 16, Satyam had announced acquisition of the two Maytas firms for $1.6 billion, but had to call off the deal within hours after stiff opposition from the investors on corporate governance issues.
Maytas's Teja Raju further said that the company's share of profit in integrated joint ventures in the quarterly results was based on management-certified financial statements of the JVs, which do not present audited or reviewed financial results on a quarterly basis.
He also disclosed that Maytas Infra was yet to fully utilise the funds raised from its IPO over a year ago in October 2007. The company had raised Rs 327.45 crore (Rs 3.27 billion), while it was yet to utilise Rs 119.83 crore (Rs 1.19 billion) as on September 30.
Maytas Infra announced on Thursday that its non-executive chairman R C Sinha has resigned from the board because of 'personal reasons.'
Shares of Maytas Infra fell by five per cent on Wednesday to close at Rs 159.05. The markets were closed for trading on Thursday.