Satyam Auditors Price Waterhouse Cooper’s Partners Arrested
After the Satyam scam broke out, words were doing rounds in public that there must have been major involvement of auditors somewhere without which there could not have been a scam of the scale of Rs.7000 crores. As if proving the peoples right, two partners of the India’s topmost audit firm Price Waterhouse Coopers-who were the auditors of Satyam Computer Services- were arrested on 24th Jan’09 on the charges of clearing forged bank statements and other documents without verification in connivance with the founder chairman B.Ramalinga Raju.
The two partners S.Gopalakrishnan and Srinivas Talluri were arrested by Andhra state CID after grilling and questioning for long hours on 23rd Jan’09. CID sources claimed that they were subsequently arrested after admission by them that they were involved in clearing unverified and forged documents ‘for a price.’ The two auditors were previously quizzed on 21st Jan’09 at the auditor’s office at jubilee hills and at Satyam Info City. On 23rd they were however summoned at CID headquarters.
The Satyam scandle came to light when its promoter and founder chairman B.Ramalinga Raju, in a confessional statement written to the directors of the company, accepted that he knowingly manipulated the balance sheet of the company for the last eight years showing non-existent cash surplus and bloated profits as well as assets.
It is here worthwhile to mention that Gopalakrishnan was also a signing authority on the financial statements of Global Trust Bank, which collapsed due to financial irregularities and had to be merged with the nationalized Oriental Bank of Commerce in 2004. He was also censured for audit irregularities in India Cements take over of Raasi Cements in 1998. At the height of the Global Trust Bank crisis in 2003, the Reserve Bank of India banned price waterhouse coopers from auditing banks account for three years.
Unfortunately it is a well-known open secret in India that a number of Chartered Accountant firms toe the management line while preparing financial documents and balance sheets to extract higher fees. Even some audit clerks too get ‘gift packs’ for ‘faithful work' while working on site. In fact in a large number of cases the auditors pass the onus of financial matters on management by getting certificates issued by management on inventories, stock in trade, major expenses etc. thereby indirectly helping the management in manipulations of the balance sheet and leaving the onus on the management if a major irregularity is detected later.
Tags: Satyam Scam , Auditors , Scam Arrests
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