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'The fraud at Satyam is an accident'

Q&A: C B Bhave

C B Bhave
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The Securities and Exchange Board of India Chairman C B Bhave today said at a press meet that Raju’s letter was not enough to put him in front of a magistrate and that the regulator will file a case against Satyam only after the investigation was complete. He also said that there was a need to assure investors that this was a one-off case.

On barring Price Waterhouse from the audit business
The investigations are going on. It is not right to blame one party or the other. We had nothing on hand apart from Raju’s letter 48 hours ago. Though yesterday was a holiday, a Sebi team visited Hyderabad to inspect the books of the company. Today the company’s chief financial officer spoke to the inspection team. The team has asked for Raju’s presence to question him. There will be a meeting with Raju tomorrow. We must wait for more evidence to come out.

On Sebi co-ordinating with US regulator Securities and Exchange Commission (SEC) to investigate the fraud
We have not sent any Sebi official to the US since the case falls in the Indian jurisdiction. But there will be co-ordinated action from both the regulators. The company has made a filing with the US SEC. We have a memorandum of understanding (MoU) with the SEC where we share information with each other.

On filing a case against Satyam
Action can be taken against the company under the Companies Act. Action can be taken under the Sebi Act or the Indian Penal Code (IPC). The police can take cognisance of the issue.

Failure of Clause 49 that stipulates the appointment of independent directors
The fraud at Satyam is an accident. After each accident, we must thoroughly investigate the cause.

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