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Prakash Yedhula (Lawyer)     07 January 2009

Should Satyam Computer be prosecuted for fraud?

Chairman B. Ramalinga Raju’s admission that Satyam Computer Services Ltd’s Balance Sheet was completely fabricated got the stock crashing down by 66.5 per cent to Rs 60 from Wednesday’s high of Rs 188.70.



Raju’s letter to the company board revealed a fraud of unprecedented proportions. He states that Satyam’s balance sheet as on Sep 30, 2008, carries an inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 reflected in the books). Further, it carries an accrued interest of Rs 376 crore which is non-existent. The books carry an understated liability of Rs 1,230 crore on account of funds arranged by Raju, and an over stated debtors position of Rs 490 crore (as against Rs 2,651 crore in the books).



The resignation letter of Ramalinga Raju is attached herewith.



The Satyam story poses a big question over the credibility of auditors in general, as PricewaterhouseCoopers was auditor of the company. The bankers to Satyam included Bank of Baroda, BNP Paribas, ICICI, HDFC, Citi Bank, HSBC.


Should Satyam and their auditors PWC should be prosecuted for fraud on the investors.


Your comments on the issue on how to curb issues like this legally.



Learning

 24 Replies

Prakash Yedhula (Lawyer)     07 January 2009

 The resignation letter of Ramalinga Raju is attached herewith.



Attached File : 8 satyam computer services ltd 070109.pdf downloaded: 201 times

PRAVEEN KUMAR VALABOJ (HR-MANAGER)     07 January 2009

yes sir they should be prosecuted under indian legal systemand a thorough investigation has to be done to know where the funds came from .

Anup Kumar (business)     07 January 2009

This is very serious matter. Serious Fraud Office of MCA will look into the same alongwith SEBI and St. Exchanges .


Role of auditors PWC will have to be examined. Such a big fraud cannot happen without auditors being involved. There might be some political nexus also as Mr. Raju had acquired various properties in other companies.


What ever happens  the truth is that investor confidence has shaken. Role of Chartered Accountants/Auditors is under Scanner.


The image of Indian co.'s listed abroad will be seriously damanged . Satyam may face action not only from Indian Regulator SEBI but also from abroad .

Ravi Arora (Advocate)     07 January 2009

yes 100% agree with mr anup

ravikumarbcombl (advocate)     07 January 2009

no question.... definitely they should be prosecuted , they have to answer for the public.... as a limited company they should, otherwise it will be a great impact and worsen the entire corporate world. It's really a shame to Auditors like PWC.  

RAKHI BUDHIRAJA ADVOCATE (LAWYER AT BUDHIRAJA & ASSOCIATES SUPREME COURT OF INDIA)     07 January 2009

Thanx Mr. Y. Prakash

PALNITKAR V.V. (Lawyer)     07 January 2009

I agree

drparasjain (practice)     08 January 2009

Once  a senior officer cofessed of a fraud, the least the govt would have done was to arrest thedirectors/ auditor andthe CFO  , sealed the offices and records of the auditors and the company and its directors. Then only a message would have gone home that government means business.


The  Ministers PCGupta makes a fool of himself when he talks of prosecution after enquiry. In this case enquiry  shoud have been custodial. It is high time the the mighty are shown the majesty of law.

JAGADEESH GOVIND (ADVOCATE)     08 January 2009

Dear All,


"Fraud" is not a new phenomena in Industry.But  Satyam case  really caused huge shock over the nation and the investors and employees of the company also affected badly.


Now the Goverment should act properly and transparently to clear the isssue and reduce the damages cuased to the nation.


JAGADEESH

RAKHI BUDHIRAJA ADVOCATE (LAWYER AT BUDHIRAJA & ASSOCIATES SUPREME COURT OF INDIA)     08 January 2009

I do agree with Mr. Anup. He is absolutely right.


 

Shree. ( Advocate.)     08 January 2009

Dear All,


         WELL DONE RAJU, YOU KIND OF PEOPLE NEED TO OUR SOCIETY TO TEACH SHOCKY LESSONS EVERY NOW AND THEN.WE INDIANS ARE MAD(E) REALLY INNOCENT AND GET DECEIVED VERY EASILY.WHERE DID THE MONEY GO? HOW COULD YOU MANAGE TO HIDE THIS KIND OF FRAUD TILL NOW? HATS OFF TO YOU, HARSHAD MEHTA, TELGI,  NATWARLAL, SHOBHRAJ AND NOW YOUR STORY WILL ALSO BE INCLUDED IN OUR INDIAN FRAUD HISTORY.THANKS FOR THE NICE-KICK OF THE BACK BONE OF THE INDIAN ECONOMY.AFTER COMMON MAN IS GOING TO SUFFER, DONT WORRY NOTHING WILL HAPPEN,YOU WILL COME OUT FROM THIS VERY SMOOTHLY, AND ALL THE INNOCENT INDIAN CITIZENS WILL REMAIN MERE SPECTATORS.

 

    A petty thief would have been arrested by now. But such a big fraud has not been arrested so far. WHAT IS OUR LAW ENFORCING AGENCIES ARE DOING NOW? WHY HAVE THEY NOT ARRESTED MR. RAJU WHO HIMSELF HAS ADMITTED TO THE FRAUD WITHOUT ANY COERCION? Why the Statutory Auditors, Company Secretary etc., have not been arrested so far? Is it not required that by this time all his Accounts should be frozen, his known assets attached, his passport impounded? All can be done, if the Government really wants, in a split second. But nothing has been done so far. It is quite baffling. There is one rule for a petty thief and another rule for Big Frauds? Why the Political Parties are keeping quiet? They have nothing to say on such a big event? It is a National shame.

Mohit Attri (lawyer)     08 January 2009

i agree wid y. parkash sir.but now the question is that wht will be further step of compny,share holder nd wht will the role of govt to save the share holders.it would amlgmate with another big IT compnies or not???

S.PRANOYSHUBHRA (Advocate)     08 January 2009

I too agree and atleast senior counsels will be making lot of money defending Mr. Raju, I hope their is no resolution from any Bar Association to not appear for him.

Sunny Honey (Student)     08 January 2009

COMPANIES WHERE PWC IS ACTING AS AN AUDITOR


Company Name

Date

 Auditor Name



Century Enka Ltd.

  Mar 2008  

Price Waterhouse & Co.



Chemplast Sanmar Ltd.

  Mar 2008  

Price Waterhouse & Co.



Colgate-Palmolive (India) Ltd.

  Mar 2008  

Price Waterhouse & Co.



Coromandel Fertilisers Ltd.

  Mar 2008  

Price Waterhouse & Co.



Cummins India Ltd.

  Mar 2008  

Price Waterhouse & Co.



Entertainment Network (India) Ltd.

  Mar 2008  

Price Waterhouse & Co.



G M R Infrastructure Ltd.

  Mar 2008  

Price Waterhouse & Co.



Gateway Distriparks Ltd.

  Mar 2008  

Price Waterhouse & Co.



Glenmark Pharmaceuticals Ltd.

  Mar 2008  

Price Waterhouse & Co.



Gokaldas Exports Ltd.

  Mar 2008  

Price Waterhouse & Co.



Graphite India Ltd.

  Mar 2008  

Price Waterhouse & Co.



Hikal Ltd.

  Mar 2008  

Price Waterhouse & Co.



Info Edge (India) Ltd.

  Mar 2008  

Price Waterhouse & Co.



Infotech Enterprises Ltd.

  Mar 2008  

Price Waterhouse & Co.



Ingersoll-Rand (India) Ltd.

  Mar 2008  

Price Waterhouse & Co.



Jagran Prakashan Ltd.

  Mar 2008  

Price Waterhouse & Co.



Kesoram Industries Ltd.

  Mar 2008  

Price Waterhouse & Co.



Lanco Infratech Ltd.

  Mar 2008  

Price Waterhouse & Co.



Marico Ltd.

  Mar 2008  

Price Waterhouse & Co.



Maruti Suzuki India Ltd.

  Mar 2008  

Price Waterhouse & Co.



Max India Ltd.

  Mar 2008  

Price Waterhouse & Co.



Mcleod Russel India Ltd.

  Mar 2008  

Price Waterhouse & Co.



Moser Baer India Ltd.

  Mar 2008  

Price Waterhouse & Co.



Motherson Sumi Systems Ltd.

  Mar 2008  

Price Waterhouse & Co.



N I I T Ltd.

  Mar 2008  

Price Waterhouse & Co.



New Delhi Television Ltd.

  Mar 2008  

Price Waterhouse & Co.



P V P Ventures Ltd.

  Mar 2008  

Price Waterhouse & Co.



Reliance Infrastructure Ltd.

  Mar 2008  

Price Waterhouse & Co.



Reliance Power Ltd.

  Mar 2008  

Price Waterhouse & Co.



Religare Enterprises Ltd.

  Mar 2008  

Price Waterhouse & Co.



Saregama India Ltd.

  Mar 2008  

Price Waterhouse & Co.



Satyam Computer Services Ltd.

  Mar 2008  

Price Waterhouse & Co.



Simplex Infrastructures Ltd.

  Mar 2008  

Price Waterhouse & Co.



Swaraj Mazda Ltd.

  Mar 2008  

Price Waterhouse & Co.



T V Today Network Ltd.

  Mar 2008  

Price Waterhouse & Co.



Usha Martin Ltd.

  Mar 2008  

Price Waterhouse & Co.



Welspun India Ltd.

  Mar 2008  

Price Waterhouse & Co.



Wyeth Ltd.

  Mar 2008  

Price Waterhouse & Co.



Zensar Technologies Ltd.

  Mar 2008  

Price Waterhouse & Co.



United Spirits Ltd.

  Mar 2007  

Price Waterhouse & Co.



H C L Infosystems Ltd.

  Jun 2008  

Price Waterhouse & Co.



H C L Technologies Ltd.

  Jun 2008  

Price Waterhouse & Co.



Mastek Ltd.

  Jun 2008  

Price Waterhouse & Co.

 


 


- Sameer Bhatia


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