Can Satyam pay salaries to staff?
A legendary entrepreneur overstated his
company's assets and understated the liabilities. Many clients who had reposed
their trust in Satyam may feel cheated and might walk away. In the hypothetical
scenario of Satyam facing a zero-revenue and zero-account receivables situation
starting today, how long would it be able to pay its 53,000 employees? The
'fudged' cash and bank balances could have lasted them 10 months but Ramalinga
Raju has already confessed on Wednesday that Rs 5,040 crore out of the Rs 5,361
crore is non-existent.
Satyam pays Rs 522 crore in salaries and bonuses on an average per month, according to its last quarterly financial update. Along with this, it also pays a smaller amount of roughly Rs 10 crore in staff welfare and employee stock compensation expenses per month.
If you include items such as reimbursements for travel, communication and other personnel-related expenses — the monthly outgo for salaries would amount to Rs 580 crore.
Now with Raju stating that it had an actual cash and bank balance of only Rs 320 crore at the end of September 30, 2008 itself, this means Satyam could have practically paid a month's salary or so at the most. But four months have passed since then and this is why there is more than a question mark on whether Satyam employees would be paid their monthly remuneration for January 2009.
Raju, in his 5 page confession, has already accepted that an amount of Rs 1,230 crore was arranged to Satyam to keep operations in the last two years.
Satyam pays Rs 522 crore in salaries and bonuses on an average per month, according to its last quarterly financial update. Along with this, it also pays a smaller amount of roughly Rs 10 crore in staff welfare and employee stock compensation expenses per month.
If you include items such as reimbursements for travel, communication and other personnel-related expenses — the monthly outgo for salaries would amount to Rs 580 crore.
Now with Raju stating that it had an actual cash and bank balance of only Rs 320 crore at the end of September 30, 2008 itself, this means Satyam could have practically paid a month's salary or so at the most. But four months have passed since then and this is why there is more than a question mark on whether Satyam employees would be paid their monthly remuneration for January 2009.
Raju, in his 5 page confession, has already accepted that an amount of Rs 1,230 crore was arranged to Satyam to keep operations in the last two years.
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