Satyam Computer fraud not only disgraced the Indian IT sector but also Pricewaterhouse Coopers, one of the most prestigious accounting firms in the world. Pricewaterhouse Coopers (PWC) was the officially appointed auditor of Satyam Computers. On April 5, 2009, Vadlamani Srinivas, former CFO, Satyam Computers, said that the entire plan to create false account was masterminded by former Satyam chairman, B Ramalinga Raju. Ramalinga Raju’s brother, Rama Raju, Mr. Vadlamani and cost accountant, G Ramakrishna, were actively involved in the fraud. In his confession, Mr. Vadlamani said that they have been conducting the fraud for the last four-five years. However, the auditors of Pricewaterhouse Coopers, S Gopalakrishnan and Talluri Srinivas, were not involved in the scam. Mr. Vadlamani said that the auditors were presented forged documents.
Mr. Vadlamani said that the communication between the banks that handled Satyam’s accounts and the auditors was limited. The correspondence between the two was done via chairman and the managing director. The management provided the auditors false documents.
On April 5th Uttam Kumar Agarwal, President, and a member of the Institute of Chartered Accountants of India (ICAI) interrogated Mr. Vadlamani Srinivas and the two PWC auditors at the Hyderabad’s Chanchalguda jail. After the interrogation, Mr. Kumar Agarwal told reporters that they heard Vadlamani’s confession and talked with the two PWC auditors and they would continue their investigation. Mr. Vadlamani admitted in front of ICAI members that the cost accountant, G Ramakrishna implemented the plan under the direction of B Ramalinga Raju.
On January 7, 2009, B Ramalinga Raju, former chairman, Satyam Computers publicly admitted of cooking up Satyam accounts. A total of Rs. 80 billion fraud sent a major tremor through the Indian corporate world. Pricewaterhouse Coppers was als pulled into the scandal as it was the official auditor but PWC officials did not comment on the matter. The Central Bureau of Investigation (CBI), Securities and Exchange Board of India and the Special Frauds Investigation Office are jointly investigating the fraud. CBI said that they would file the chargesheet on April 9. CBI wanted Ramalinga Raju and his brother, Rama Raju, to go through a lie detector test but they denied to cooperate.
Formed in 1998, the Pricewaterhouse Coopers is the largest professional services firm. In 2008, its cumulative worldwide revenue stood at $28 billion. The firm employs more than 146000 people in 150 countries. According to news reports, the two PWC auditors were arrested on January 24, 2009 by Andhra state CID. Prior to that day, they were quizzed on January 21st at the auditor’s office at jubilee hills and at Satyam Info City. On January 23rd, they were called at the CID headquarters and questioned for long hours.
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