Satyam ex-CFO blames Raju, auditors for scandal
The ex-chief financial officer of India’s Satyam Computer Services has blamed the former chairman, B. Ramalinga Raju, and internal and external auditors for financial fraud at the company, according to a media report.
The report came as the software giant said Monday that it was “in the process of appointing an independent accounting firm within the next 48 hours to restate the financials and announce the [fiscal third-quarter] results.”
Srinivas Vadlamani, Satyam’s the former chief financial officer who is under arrest, made the accusations about Raju and the auditors in what was described as his confessional statement to police, the Economic Times of India reported.
According to the report, Vadlamani told police:
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The auditors never pointed out any “deficiencies” during their discussions, in what appeared to be a reference to PricewaterhouseCoopers, Satyam’s external auditor, and the analyses prepared by outside auditors that cover quarterly reports and other financial documents.
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“The company’s fixed deposits were unreal and fictitious, which were managed with an understanding between the audit section and management,” an apparent reference to internal auditors.
Satyam’s bank deposits were handled directly by Raju, and Vadlamani was asked not to look into them, the former CFO said on Monday, according to the report in Monday’s online edition of the newspaper.
Nandini Chatterjee, a spokeswoman for PricewaterhouseCoopers in India said the report implied that Vadlamani blamed Satyam’s audit section and not her company.
She didn’t immediately respond to an emailed request to comment on the this paragraph in the Economic Times report: “Satyam Computer Services CFO Srinivas Vadlamani on Monday blamed the firm’s statutory auditors Pricewaterhouse Coopers and the disgraced founder of Satyam B Ramalinga Raju for perpetrating the [70 billion rupee ($1.43 billion)] financial fraud. In his confessional statement to the police, Srinivas said the auditors never pointed out any ‘deficiencies’ during their discussions.”
Vadlamani, along with Raju and Satyam’s former managing director B. Rama Raju, are under arrest following Ramalinga Raju’s disclosure to the board last week that he had had inflated Satyam’s cash balances by more than $1 billion. The Rajus are brothers and cofounders of Satyam.
HONG KONG Source /courtesy: (MarketWatch)
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