MCA wants PSUs to relax bidding norms for Satyam

The Ministry of Corporate Affairs (MCA) has written to various ministries, including telecom, railways and steel, to tell their public sector undertakings (PSUs) to exempt the crisis-ridden Satyam from submitting balance sheets while bidding for projects as the IT firm has yet to finalise its accounts.

The MCA wrote the letters to various ministries following a request by the Satyam board that PSUs should not insist on the financial statements and other information, like details of turnover from the company, while seeking bids.

When contacted, chairman of the Satyam board Kiran Karnik said, “We have approached the ministry seeking a formal letter, which says that PSUs should not insist on Satyam’s audited financial statements. We still have not received our restated accounts.”

Pointing out that Satyam was not seeking any favours as it was a viable company, he added: “We want to get selected on merit. All we have asked for is a relief from submitting our audited accounts.”

Under the standard bidding norms, a company is required to furnish audited financial statements at the time of submission of bids for projects.

While clearing the takeover of Satyam by Tech Mahindra, the Company Law Board exempted the IT firm from filing returns and documents up to December 31, 2009 as the company has to restate the accounts for nearly six years.

In order to know the correct financial position of the company, the government-appointed Satyam board had asked global auditing firms KPMG and Deloitte to restate the accounts of the IT company. The restatement of accounts of Satyam became essential after its founder chairman B Ramalinga Raju confessed in January to fudging the account books for several years.

The two auditing firms, Karnik had earlier said, were in the process of restating the books of accounts and the process is taking time. According to an inquiry report by the Serious Fraud Investigation Office (SFIO), which investigated the scam, Satyam’s account books were being fudged since 2001-02 to show good financial results and ensure higher prices for its shares in the stock markets.