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| Govt tightens noose around Satyam | |
| BS Reporter / Hyderabad/new Delhi/mumbai/bangalore January 8, 2009, 19:07 IST | |
There was no respite today for the founder and Chairman Ramalinga Raju and management board of the beleaguered Hyderabad-based Satyam Computer Services with government and regulatory bodies tightening their grip to unravel the extent of falsifying of accounts to which Raju had admitted on January 7.
While the Andhra Pradesh government said it was taking up the matter with the highest political echelons, the Ministry of Corporate Affairs (MCA) has assured the AP government of cooperation. Moreover, they have asked the Securities Exchange Board of India (Sebi) to scrutinise the accounts of eight subsidiaries of Satyam.
All the accounts will be inspected and a report is expected to be submitted within the next three working days. The data will also include any exposure if any of the international branches of Indian banks have with the company and its related parties.
"We are open to all possible action, including replacing the board but, as of now, we have not taken any decision," said Prem Chand Gupta, Minister of Corporate Affairs.
He added the action would be coordinated with the finance ministry, law ministry, market regulator and Institute of Chartered Accountants of India (ICAI). He also hinted that the government is thinking of revisiting certain corporate governance laws.
Auditing firm, Price Waterhouse, too may once again face a reprimand from the Reserve Bank of India following its alleged involvement in the case, according to sources. On its part, ICAI today said it has written letters to Satyam Computers, Registrar of Companies (RoC), Sebi and the statutory auditors- PricewaterhouseCoopers- seeking information and relevant documents relating to overstatement of profits by the Hyderabad-based software services firm.
These parties have 21 days to reply to the notice.
"Unless we have the documents with us, it is very difficult for the disciplinary committee to take action," said Uttam Prakash Agarwal, vice president of ICAI. Based on the information collected, the committee would reconstruct the balance sheet of Satyam. Further, ICAI has called for 'working paper file', which need to be maintained by the statutory auditors. Ved Jain, president of ICAI, also met Gupta today and briefed the minister on the latest development and what future plan of action the institute contemplates.
Price Waterhouse, on its part, issued a press statement today stating: "...The audits were conducted in accordance with applicable auditing standards and were supported by appropriate audit evidence. Given our obligations for client confidentiality, it is not possible for us to comment upon the alleged irregularities."
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