Satyam says three weeks needed to assess books
2 hours ago
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NEW DELHI (AFP) — India's fraud-hit Satyam Computer Services expects auditors to take three weeks to discover the true state of the technology outsourcing giant's finances, a company spokesman said Monday.
"The accounts are getting tallied for where the anomalies are," the Satyam spokesman told AFP. "The auditors are doing this.
"It is going to take three weeks for a judgment (by the auditors) of how much has gone, and where it has gone," the spokesman said.
The statement came after the New York Times quoted an unnamed investigator saying Satyam founder B. Ramalinga Raju pocketed huge amounts of cash from the company -- rather than just padding its books as he has claimed.
Indian leaders, meanwhile, appealed to the international business community not to judge the country's corporate governance standards by the Satyam case.
"Satyam is a one-off case of delinquency," Commerce Minister Kamal Nath said at a business forum in New Delhi. "We're a growing economy and a one-off case should not affect it."
However, Satyam said in an emailed statement that US-based State Farm Insurance had scrapped its outsourcing contract with the company, which is headquartered in the southern city of Hyderabad.
Satyam said it was "disappointed" at the decision but added over 90 percent of its clients "had committed" to continuing with the firm. The company, which has over 600 clients, generates 97 percent of its revenues outside India.
In a separate development, the government ordered a fraud probe into Raju's family-promoted Maytas Properties and Maytas Infrastructure, saying it suspected a link between these two companies and the scandal at Satyam.
"Inspectors investigating the matter in Satyam have informed us that there seems to be a nexus between the events that have taken place in Satyam and... Maytas Properties and Maytas Infrastructure," Corporate Affairs Minister Prem Chand Gupta told reporters in New Delhi.
Satyam's spokesman said the company was focusing on "day-to-day operations" and meeting clients "to assure them what has happened will not affect business continuity."
India's business community has been rocked by Raju's declaration on January 7 that he had faked a cash balance of more than one billion dollars and inflated profits for years.
The New York Times, however, said investigators found a "maze" of 300 companies related to Raju that were used to siphon money from Satyam. Corporate Affairs Minister Gupta also said there appeared to have been a "diversion" of funds from Satyam.
Raju, a pioneer of India's outsourcing boom, was questioned Monday by police for a second day in Hyderabad along with his brother Rama Raju and Satyam's former chief financial officer Vadlamani Srinivas.
Raju, whose bail hearing has been postponed until Thursday, has previously insisted he had not "taken even one rupee/dollar from the company."
Top global accounting firm PricewaterhouseCoopers audited Satyam's finances and is now being probed by India's accounting board for its failure to detect the fraud. It has been replaced by KPMG and Deloitte Touche.
Satyam's new government-appointed board is searching for a new chief executive and financial officer, the company spokesman said, adding the board would meet weekly "to address ongoing issues" until the appointments were made.
The spokesman denied a report in India's Economic Times that the board was set to name an investment banker to scout for a buyer for Satyam.
"Employees are reporting to work on time, morale is still high, everyone's trying to keep their chin up," the spokesman said.
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