Satyam – World has become a big church
If not, what will explain the confessions galore that we are witnessing now? Mr. Raju must take the credit for opening the confession gate.
I d0 not know if it was by design or mere co-incidence that Mr. Raju came out with his confession on the sacred day called “Vaikunta Ekadesi” the day the heaven’s gates are believed to be opened for the general public by God Himself. May be he consulted his astrologers before making the confession. May be they advised him that if he did that on that day he might suffer the least damage. Who knows?
Mr. Raju opened the gates and then the confessions started pouring in. The CFO of the company followed suit as the environment didn’t suit him to hide.
Now, after keeping mum behind the “client confidentiality cloud” the auditors have come out in the open with their confession. Below is the report I saw on the Reuters website.
PWC says Satyam audit opinions may be unreliable
MUMBAI, Jan 14 (Reuters) – PricewaterhouseCoopers, the previous auditors at Satyam Computer Services (SATY.BO), said its opinions on the company’s financial statement may be rendered “inaccurate and unreliable”, given revelations of fraud by the founder of the outsourcuing firm.
The firm said Ramalinga Raju’s resignation letter, which included revelations of overstated profits, may have a material effect on the veracity of Satyam’s financial statements presented to it. It said it audited the firm from the quarter ended June 2000 to the quarter ended September 2008.
“Consequently, our opinions on the financial statements may be rendered inaccurate and unreliable,” the auditor said.
The Jan. 13 letter from Price Waterhouse to Satyam’s new board members and the company secretary was released by the stock exchange. (Reporting by Prashant Mehra)
My questions:
1. Can the shareholders ask PWC to return the fee that it earned from Satyam for issuing a unreliable report?
2. Should the shareholders (Auditor’s are representatives of the shareholders) sue PWC for damages?
3. Which are the other public and large private companies that PWC audited where the same audit team conducted the audit? Should that not be made public so that the stakeholders of those companies know about the reliability of information in respect of those companies?
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Hi Sathya,
I got introduced your blog very recently after sathyam debacle. I enjoy reading your posts constatntly. Very happy Pongal.
-Prasad
Hi Prasad,
Welcome to my blog.
Thank you and I wish also a very happy Pongal.
Hello Sathya,
Your articles are very informative. I think the questions regarding PWC should be
‘What is the need of an auditor if they are relying on ‘company provided explanations and verbal and written representations’ ?. Heck, in that case, you can pull someone off the street and ask him to be the ‘independent auditor’ for a couple of smokes and a cup of chai instead of paying several million rupees and retaining PWC. The job of PWC was to simply ask ’show me the money’ which they seem not to have done..
This is what happens when greed takes over and we end up in moral bankruptcy. There is no doubt this scam required financial engineering and co-ordination between the board, auditors, bankers, politicians and the board of Maytas.
The obvious immediate action should have been freezing assets owned by Satyam and Maytas board members, their families, requiring them to surrender their passports to the Indian government till their statements are recorded.
Shocking revelation that this is not Raju’s first scam and he had siphoned off Government money in his textile mill venture shows once a scamer always a scamer.
Bah! I am fed up of seeing scams every day..absolutely no Satyam left in this world..literally.
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