Centre orders inspection of Satyam subsidiaries’ accounts

A day after Satyam’s erstwhile Chairman B. Ramalinga Raju owned up to fudging of accounts to the extent of over Rs. 7,0000000000, the Government on Thursday ordered investigation into the books of accounts of eight subsidiaries of the Hyderabad-based IT major. The accounts of the subsidiaries under the scanner are Maytas Properties, Maytas Infrastructure, Satyam BPO, Nipuna Services, Knowledge Dynamics, Nitor Global Solutions, Ca Satyam ASP and Satyam Venture Engineering Services. Corporate Affairs Minister Prem Chand Gupta told newspersons here that the probe into the books of accounts of these eight Satyam subsidiaries would be conducted as per the provisions of Sec. 209A of the Companies Act. Mr. Gupta informed that the Financial Reporting Review Board of the Institute of Chartered Accountants of India (ICAI) had also been asked to get hold of the internal working documents of Satyam Computer Services and submit its report to the institute within three days. Alongside, the ICAI has been directed to take appropriate action against the erring auditors. Mr. Gupta said that his Ministry was simultaneously exploring the various options available for penal action against the erring company and its auditors. “[The] Government is keeping all options open. We are in close interaction with all other regulators to take coordinated action... The ROC and the Securities and Exchange Board of India (SEBI) are working in Hyderabad. There feedback has been sought,” he said. Also, in a bid to prevent the occurrence of Satyam-like frauds in future, Mr. Gupta said that the Government would review and strengthen various provisions of the new Companies Bill that is now awaiting Parliament approval. “After the Satyam case, there is a case for re-looking at certain provisions of the Companies Bill, 2008, to enable the Government to take swift and more effective action in cases of large-scale fraud.” Noting that the Satyam case appeared to be a “large scale fraud”, Mr. Gupta stressed that the Government would “leave no stone unturned to punish the guilty” so as to protect the interests of stakeholders and shareholders.