Amid talk of an acquisition for embattled outsourcer, Satyam Computer Services, reports from Reuters suggest the company may have up to a fifth fewer staff than it reported. The original report, exposed in India’s popular daily the Economic Times, suggested that Satyam’s headcount could have been inflated by 15-20 percent, citing unnamed sources.
According to the newspaper the Serious Frauds Investigation Office believes Satyam's headcount could have been inflated to siphon off money as salary payments for non-existent employees.
"Since a major chunk of the costs were actually salaries, a minor distortion in the number of employees could change the personnel expenses significantly," the paper quoted the source as saying.
The speculation comes at a difficult time for the company prior to a possible acquisition deal by Larsen & Toubro (L&T), India’s largest engineering and construction conglomerate. The company has appointed Japan's Nomura to advise on a possible deal after expanding its holding in the company to 12%. After spending US $140 L&T reportedly plans to merge its ITO business L&T Infotech with Satyam.
It is currently uncertain as to whether the staff speculation will affect L&T’s plans.