Satyam to appoint Indian auditing firm

The board of scam-tainted IT services company, Satyam Computer Services is close to appointing an Indian audit firm to certify restated accounts of the company.

"The Satyam board has sent us a list of 10 Indian accounting firms," said Uttam Prakash Agarwal, the newly-elected President of Institute of Chartered Accountants of India (ICAI) today. ICAI will screen the firms to see if there are any pending cases against them and will revert to the Satyam board.

ICAI also submitted the interim report on the Satyam financial scam. A high powered committee of ICAI was appointed on January 12, 2009, to examine the Satyam fiasco in relation to accounting and auditing apects, including financial reporting requirements, helping with investigation being carried out by various agencies and to suggest changes, wherever required.

ICAI will submit the final report within two months, Agarwal said. He also reiterated that Price Waterhouse, the statutory auditors for Satyam, can not certify the restated accounts as its role is also being probed in the Satyam financial fraud. A change in statutory auditors can be done only by shareholders at a general meeting.

ICAI said the report is interim in nature since restatement of Satyam's accounts is in progress and is expected to take another two months to complete. ICAI is scheduled to hold a press conference later to give more details on the interim report.

The new Satyam board had appointed KPMG and Deloitte to restate the accounts after Satyam's founder and former Chairman B Ramalinga Raju admitted on Jan 7 of falsifying the accounts. "Satyam has clients in 66 locations and the accounts pertains to several years" ICAI said. "Only after the restated figures are available, duly certified by an auditor, it will be possible to asess the total impact."

During discussions with various regulators and other parties, it has come to light that a number of institutions sold off their holding during the past one month. One of the institutions sold 2.45 crore shares of Satyam between December 23, 2008 and January 5, 2009. These shares were pledged with the institutions by various companies belonging to the Raju family.

"We look at it as a grave matter and the same needs to be further examined," ICAI said.

The audit firm Price Waterhouse has submitted audit reports and other documents which were asked from them and the same are being examined. Before expressing an opinion, it will be necessary to see the restated figure, the ICAI President added.

The institute is also examining the association of partners of the audit firm with other firms, usage of the same premises as head office of Price Waterhouse and branch office of other firms and allegations as to usage of common PAN numbers by several firms.

The ICAI is also considering moving court seeking permission to interrogate scam-hit Satyam Computer's erstwhile promoters. The ICAI would also seek court permission to interrogate Satyam's erstwhile chief financial officer, Uttam Prakash Agarwal said. B Ramalinga Raju was the chairman of Satyam while Vadlamani Srinivas is the erstwhile chief financial officer of the company.