Satyam I - what likely happened

In my FT piece, I discussed what was wrong with the story of the Raju confession, rather than what may be the correct story. Clearly, no one except those who carried out the fraud would likely know the story. Here is what may have happened as pieced together from my conversations with some of the people who are close to the action. Remember this is a semi fictional work, do feel free to discount it.

Sometime before Sept 2008, Raju and some insiders decided to take away some money. This could either be a personal theft or more likely to be a transfer to Maytas or other property companies owned by Raju. Between September and December 2008, and after the last limited audit by the outside auditors, this money was 'lent' to these affiliates (though it is difficult to imagine writing a cheque for 7,000 crore rupees (Rs.70 billion)). The lending was expected to be accounted for in the shady purchase of the two Maytas companies in the Dec 16th Board meeting at an inflated value - rubberstamped by a convenient Board of Directors. As the shareholders forced the hands of the directors to reverse the purchase of the two companies, Raju was left with a gaping hole which could not be accounted for. Just before the next limited audit was to start - he decided to come clean - but only in a half baked story of inflating profits over 7 years. He missed several details, including the obvious one - that it is easy to inflate profits, it is nearly impossible to inflate cash/bank balances without the connivance of nearly every person associated with the listed entity, chief amongst them the auditors.

Note: The key link if this hypothesis is true lies with the various banks, as the money would have been stolen using the banking channels. I read an interesting piece about the management being quizzed sometime back asking them why huge moneys were kept in 0 interest current accounts instead of a fixed deposit. The last annual report gives the names of all the unscheduled banks with amounts deposited with each; but the bulk of the deposits are with scheduled banks and no breakup is given. So who are these banks and can someone please go quiz them? Can we get the RBI use its clout to do some investigative work on the banks.