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Auditors in league with Rajus: Andhra police
BS Reporter in Hyderabad | January 27, 2009 13:12 IST
Satyam Computer Services [Get Quote] founder B Ramalinga Raju, ex-CEO B Rama Raju and ex-CFO Vadlamani Srinivas in window-dressing the company's accounts, according to the remand case diary filed by the Economic Offences Wing of the Andhra Pradesh Crime Investigation Department.
According to the case diary, a copy of which is available with Business Standard, "the auditors have facilitated the accused and other directors in committing a brazen fraud.'' They also abetted in the forgery of securities and inflation of profits, the case diary added.
The Andhra Pradesh police arrested the two Price Waterhouse auditors on January 24 and produced them before a magistrate on January 25. The two were sent to judicial remand for 14 days.
Gopalakrishnan is Price Waterhouse's chief relationship partner and Talluri its engagement leader. Gopalakrishnan was one of the auditors who signed the tainted Global Trust Bank balance sheet.
An email sent to PricewaterhouseCoopers seeking its comments on the police charges remained unanswered. Price Waterhouse is its audit arm.
The police submitted to the additional chief metropolitan magistrate that the accused committed offences including criminal conspiracy, criminal breach of trust, cheating, forgery and inflated profits to make the shareholders believe that the share value of Satyam would go up.
They showed more profits to attract more business and in the process showed nonexistent cash reserves, it said and added that the auditors did not verify the correctness of the balance sheet.
"A legal obligation to scrutinise the books of accounts and then certify their correctness, they (the auditors) failed in their duties under negligence,'' the police said.
The police, who had earlier searched the auditors' office and houses, seized computers and laptops used for the accounting along with some bank confirmation letters.
The police requested for custody of the auditors as the investigation could not be completed in one day.
The role of the auditors came under the scanner of various investigating agencies following the confessions made by Ramalinga Raju. Former CFO Srinivas had earlier said he was provided with audited copies of the reports on which he just signed.
Talluri had signed the last Satyam audit report on behalf of Price Waterhouse.
He maintained that the consolidated financial statements gave a 'true and fair view in conformity with the accounting principles generally accepted in India'.
After Ramalinga Raju's confession, the audit firm said its opinions on the financial statements 'may be rendered inaccurate and unreliable.'
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